Customers will receive £114m off their water bills next year as the regulator has said water companies fell short of standards.
The majority of water and wastewater companies in England and Wales underperformed, Ofwat said as part of its water company performance report.
As a result, all but five of the 17 utility providers will have to give back money to customers. The others can increase prices.
Water firms were classed as leading, average or lagging in categories including pollution incidents, customer service and leakage. No company was ranked as leading.
Seven are categorised as lagging in the 2022-2023 targets: Anglian Water, Dŵr Cymru, Southern Water, Thames Water, Yorkshire Water, Bristol Water and South East Water.
A further ten companies are listed as average.
Improvements have been made in areas since 2020, Ofwat said, such as leakage and internal sewer flooding, but progress has been “too slow”. Last year all but one company achieved the performance level for unplanned water outages.
It follows an apology from water and sewage firms in England for “not acting quickly enough” on spills. In May they vowed to spend £10bn to fix the problem.
During the 2022 to 2023 year less than half of water companies met targets on reducing pollution and leakages, Ofwat said on Tuesday.
Over the past year there was also a decline in customer satisfaction, it added.
At the same time, Ofwat said, companies had not fully invested service enhancement funding.
While it’s good news for bill payers, the regulator said it is not good news overall.
“It is very disappointing news for all who want to see the sector do better”, Ofwat chief executive, David Black said.
“It is not going to be easy for companies to regain public trust, but they have to start with better service for customers and the environment.”
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Housing secretary Michael Gove is planning a major change to rules on waterway pollution in a bid to boost home building in England.
The utility which supplies one in four people in Britain with water, Thames Water, pleaded guilty to four charges relating to illegally discharging waste and in July was fined more than £3m for polluting rivers.
