The water company were found to have illegally abstracted 22 billion litres of water from boreholes in the county in 2018, enough to fill 8,800 Olympic swimming pools, the Environment Agency (EA) has said.
It caused a significant decline in the Fylde Aquifer, which is an important public water supply for residents in the North West and also helps the flows of local rivers.
The over-abstraction during a period of very dry weather in 2018 means the aquifer will take years to recover, according to the EA.
Carol Holt from the Environment Agency explains why abstracting too much water is problematic for the environment.
Carol Holt, area director for Lancashire, said: "While water companies are allowed to abstract water from the environment, over-abstraction, especially during times of prolonged dry weather, has damaging impacts to our environment.
"Our actions as regulator have led to today’s sentencing and we will continue to strive for a better water sector across the country to protect our precious water supplies now, and for the future.
"We are transforming our approach to regulation, holding the water industry to account and working with water companies such as United Utilities Water Ltd to help them improve."
United Utilities was prosecuted at Warrington Magistrates' Court and was handed the fine on Tuesday, after the EA investigation revealed the company had taken more water than was allowed by five of its abstraction licences in the Franklaw and Broughton Borehole Complex.
During the hearing, the water company said it would support a number of local Rivers Trust schemes to help the environment and that it has made internal improvements to ensure over-abstraction does not happen again.
Grant Batty, water services director at United Utilities, said: "We apologised for the breach in water abstraction that happened five years ago in 2018.
"We did not exceed the amount of water we could abstract on a daily and yearly basis, but we did inadvertently breach a three-year rolling limit on the abstraction licence. As soon as we discovered this, we established additional controls to ensure it never happens again.
"We took action straight away, pleaded guilty and also made a £3 million voluntary contribution to local environmental improvement projects."
The EA said its routine inspections of boreholes in Lancashire identified the over-abstraction and United Utilities was required to hand over data on the amount of water taken for the analysis, which revealed the extent of the offence.
Water minister Rebecca Pow said: "It is absolutely right that companies that harm our environment are held to account by the courts, as has happened with United Utilities today.
"Through our Plan for Water we are driving forward work to improve our water system and deliver the change people want to see – including tougher enforcement, tighter regulation of water companies and increased investment."
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