Welsh Water has admitted that they failed to accurately report leaks which were much higher than first recorded and around 1.4 million customers will be given a £10 rebate each.
Ofwat launched a probe into the leakage reporting for 2020 and 2021 and will look into if any further actions is required.
Welsh Water will give 1.3 million households along with 100,000 business customers £10 credit which will cost the company around £1.4 million.
Welsh Water has said that they will spend £54 million to fix leaks over the next two years bring their total investment to £284 million.
Pete Perry, chief executive of Welsh Water, said: “We are very sorry and disappointed that this has happened.
“We’re investing an additional £54 million over the next two years to identify and reduce leakage as quickly as possible and we have shared the findings of our investigations with our regulator.
“Whilst our robust assurance process ultimately identified the issue, there were failures in our governance and management oversight processes that allowed this in the first place.
“We have made the necessary changes to how we manage leakage reporting and closed the gaps in our reporting and governance processes.”
David Black, chief executive of Ofwat, said: “We are committed to holding companies to account for performance and for sharing timely, accurate, and complete data with us and their customers.
“We recognise that Welsh Water came to us when it became aware of the issue with the accuracy of its performance data.
“Ofwat’s investigation will consider Welsh Water’s restated performance figures, the circumstances that led to the company reporting inaccurate performance, and what steps it has taken or is taking to address these failings.”
Emma Clancy, chief executive of the Consumer Council for Water (CCW), said: “We recognise Welsh Water has moved swiftly to admit its mistake and the £10 rebate will go some way to reassuring its customers that it regrets the damage this will have caused to people’s trust in it.
“Customers will want the company to take the right steps to ensure this doesn’t happen again.
“Our research shows leakage from water companies affects customers’ own motivation to save water so Welsh Water will need to build trust on this issue.”