Minister points to affordability constraints as green watchdog downgrades Welsh Water

Natural Resources Wales (NRW) has downgraded the environmental performance rating of Welsh Water to two-stars, which means it requires improvement.

The regulator reported from its annual review that pollution incidents rose by 7% to 89 in 2022, with those having a high or significant impact rising from three to five. It also found Welsh Water had failed to make improvements to the number of incidents self-reported to NRW. These fell to 65%, a decrease of 7% from 2021.

NRW chief executive, Clare Pillman, called for a “step change in performance that is so clearly needed and called for by us and the public”.

Speaking in the Senedd, minister for climate change, Julie James, said the price review mechanism was the underlying problem. "I am very concerned at their drop in performance,” she said, referring to Welsh Water. She continued: “I will be holding Welsh Water Dŵr Cymru's feet to the fire over this. But the truth is that they have a limited ability to invest because of the price mechanism. They have set that out for you, and every other Senedd Member, in the information that they've provided.”

James added: “I do not understand how putting the infrastructure in place to have the very best water quality in the world is not an investment programme capitalised by the government. I do not understand why that has to be put onto the bill payers. That is a choice by the UK government.”

NRW also reviewed Hafren Dyfrdwy, but explained the company is not subject to a star rating due to its relatively small operating area in Wales. Pollution incidents from Hafren fell from eight in 2021 to four in 2022. None were significant. NRW said it was still pressing the company to improve its rate of self-reporting incidents, after only two of the four incidents were self-reported, compared with six out of eight incidents in 2021.