Hafren Dyfrdwy has apologised to customers after Ofwat found the company breached legal obligations over the operation of its sewage treatment works and sewerage network.

The regulator published its draft decision on Thursday, 16 October, finding Hafren Dyfrdwy had failed to effectively provide drainage and deal with the contents of its sewers, with consequences for customers and the environment.

Ofwat said the seriousness of the breaches would ordinarily have resulted in an enforcement order and a penalty equal to 3.5 per cent of the company’s relevant turnover, worth around £255,000.

Instead, the regulator is proposing to accept a £280,000 package of undertakings from Hafren Dyfrdwy, intended to secure compliance while delivering environmental benefits.

Steph Cawley, Hafren Dyfrdwy Managing Director, said: “We accept Ofwat’s findings and apologise to our customers for these issues that we’re making good progress with resolving.

“Last year, we reduced average spills to 21.6, from 36.2 the previous year, but we know there’s more to do.”

The company said it is undertaking its largest ever investment programme, spending £250 million between 2025 and 2030 on infrastructure, services and environmental improvements.

That includes £11 million specifically aimed at storm overflows, with Hafren Dyfrdwy saying it is on track to reduce average spills to fewer than 20 a year by 2030.

Hafren Dyfrdwy said the programme would also improve resilience across its wider wastewater network, alongside work intended to reduce the environmental impact of discharges and improve performance at problem sites.

Under the proposed redress package, £278,000 would fund the installation of two storm-water balancing tanks at Llansantffraid Sewage Pumping Station to reduce spills.

A further £2,000 would support Llanfyllin Dolydd Building Preservation Trust in creating wetland habitat and planting trees at Llanfyllin Workhouse.

Ms Cawley said the measures formed part of the company’s commitment to “the environment, our communities and future generations”.

Hafren Dyfrdwy said it has also resolved compliance issues identified by Ofwat concerning whether it had adequate resources, planning systems and internal controls to ensure its assets performed properly.

The company operates separately from Welsh Water and provides wastewater services in parts of Powys.

Ofwat stressed that the cost of the proposed £280,000 package must be met by the company and its shareholders and cannot be added to customers’ bills.

The case is the ninth to reach an outcome in Ofwat’s wider wastewater investigation into large water and wastewater companies in England and Wales. The combined value of fines and undertakings across those cases has now exceeded £300 million.

Ofwat said the public wanted to see “transformative change” in the water sector and that companies would continue to be held to account where they failed to meet their obligations.

The company said the proposed measures were designed to address both immediate compliance concerns and longer-term environmental performance, while reducing the frequency of storm overflow operation across its network.

The decision remains in draft, with a 21-day public consultation open until 6 November before Ofwat makes its final decision.