Regulator Ofwat has launched an investigation into South East Water after repeated outages have left thousands of households across Kent and Sussex without drinking water.
Five companies - Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water - argued Ofwat's original decision left them unable to meet regulatory requirements.
The water group, which sits on a £16.8billion debt pile, was given separate fines related to its wastewater business and the payment of unjustified dividends to shareholders.
The watchdog, which ministers have vowed to scrap, is set to launch the multi-million-pound advertising and information campaign to reduce water usage by homes and businesses.