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We pay for use in Canada. Water charge is ridiculous too considering we have the worlds largest supply of frest water. When it comes to supply vs. demand we are getting hosed.
You're paying for the service so you have to look at infrastructure costs. If the water is going further distances and uphill it costs more. If the price of power goes up it costs more. Amount of water probably matters more in terms of proximity than traditional supply & demand market forces.