The fines for under-performing suppliers will be passed on to customers through lower bills in 2024 and 2025, the industry regulator said.
It found that most companies failed to meet key targets on reducing pollution, leakages and supply interruptions.
Thames Water will be ordered to pay out the most to its 15 million customers, at nearly £74million.
The struggling firm faced crisis talks earlier this year over its massive £14billion debt pile, but it managed to secure an emergency funding package from shareholders.
The watchdog last month warned that Britain’s biggest water supplier has “significant issues to address” over its financial strength.
Anglian Water customers will meanwhile have more than £27million taken off their bills and Dwr Cymru about £24million.
However, at the same time some companies will soon be able to charge their customers more for their water after improving their performances.
Severn Trent Water will be allowed to add £89million to the bills of the 4.6 million customers it serves from next year.
United Utilities can charge more than £25million extra as well.
Ofwat said a total of 12 firms will have to return a total of around £193million to customers for failing to meet targets. Five firms that did meet targets will be allowed to charge about £123million more in all.
This means the net total paid out to customers is £70million – around £1 for every head of population.
Ofwat judges the performance of water companies in England and Wales each year against the “stretching” targets they set in 2019 for a five-year period until 2025.
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This notice was published: 2023-11-15 09:44:00