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Welsh Water was told it had been negligent
Welsh Water has been fined £1.35m for failing to properly monitor water quality at 300 different sites.
The company pleaded guilty to 15 charges relating to more than 800 offences in 2020 and 2021.
It blamed the failures on a reorganisation and the implementation of a new system at the same time as the Covid pandemic.
District judge Gwyn Jones concluded the company had been negligent and had "no doubt caused significant embarrassment to all those dedicated personnel in Dwr Cymru".
Since 2010 there has been a requirement on water companies to carry out self-monitoring of discharges from their sewage works and water treatment works, Natural Resources Wales (NRW) said in a statement after the ruling.
"Upon receiving its 2020 annual report, NRW officers were alarmed to find that the quality of the information provided had noticeably deteriorated compared to previous years, with over 600 breaches recorded.
"These were spread across some 300 sites across Wales and Herefordshire," it said.
It added that "contingency plans should have been in place to ensure the company met their legal duty to comply with their permits while going through the restructure".
Welsh Water has also been ordered to pay just over £70,000 in costs after pleading guilty, NRW said.