South East Water must pay £30.5million after supply disruptions affected thousands of its customers in Kent and Sussex.
Water regulator Ofwat said it came after the conclusion of three investigations into the company’s repeated failings.
The redress package will be paid for by the firm’s shareholders and not through customer bills.
A spokesperson for the water company said they were “incredibly sorry” for the historic supply disruptions to customers in Kent and Sussex.
“We know this caused significant disruption and concern and we acknowledge the failings identified by Ofwat,” he said.
“This is not the standard of service our customers deserve.
“Our priority is to ensure that the resolution of this investigation directly benefits those who are suffering most.”
Ofwat says the solution will include £5m to provide free water butts for households, £5m to bring smart metering to businesses and other non-domestic customers and a further £5m for on-site storage to help manage supply during peak demand.
