Ofwat wants to hit South East Water with a £22 million fine after water cuts left more than 286,000 people repeatedly without supply.
The massive fine follows an investigation into multiple supply interruptions that hit homes and businesses across Kent and Sussex between 2020 and 2023.
The watchdog said the firm “lacked ownership” for fixing the root causes of the persistent problems.
Ofwat’s probe found South East Water had “failed to maintain supply-system resilience” and did not properly look after its own infrastructure.
It also failed to plan ahead to ensure it had sufficient headroom to cope with periods of high demand.
Ofwat said this left the network “more likely to fail” in tough weather, from long dry spells to thaws after a cold snap.
The impact on households was severe.
Customers were left with no tap water, unable to shower or bathe, and could not flush their toilets.
Ofwat also condemned the company’s response, calling its emergency effort “slow and disorganised”.
The investigation highlighted shortages of bottled water and said there were “not enough tankers or support for vulnerable customers”.
Chris Walters, interim chief executive of Ofwat, said: “South East Water’s significant failings caused major disruption and had a huge impact on thousands of its customers.
“Not only did the company fail in its duty to provide a water supply to meet the demands of its customers, but it also fell short when it came to providing support for customers who lost their supply.
“They must do better.”
Ofwat said South East Water “has not taken ownership of these issues”, with major disruptions continuing to happen far too regularly.
Since November, repeated outages have left tens of thousands of properties without supply across the two counties.
An outage around Tunbridge Wells left about 24,000 properties without drinkable water for almost two weeks in November and December.
In January, Ofwat said it had launched a separate investigation into the latest problems.
South East Water revealed it had recently mounted a legal challenge against the regulator’s draft decision.
A South East Water spokesman said: “We recently filed for judicial review of an Ofwat draft decision and sought an injunction.
“Following a hearing, the court did not grant the interim injunction. We respect the court’s decision on this.
“We are now considering Ofwat’s draft decision and will respond via the appropriate channels, ahead of its final decision. We have no further comment at this time.”
Ofwat said its consultation on the proposed £22 million fine is open until April 13.
Ofwat will decide on the penalty after that date.
In January 2026, Ofwat opened a separate probe into whether South East Water breached its customer service licence condition during the latest outages, the first time the regulator has used that customer-focused enforcement power.
That customer service probe could ultimately lead to financial penalties of up to 10 per cent of annual turnover, and in the most severe case a special administration regime if the company’s licence were revoked.
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