Interesting - I'm all for surge/demand led pricing on "optional" things like electricity use (to a point), internet, taxis etc. but financially restricting access to water just seems a bit too dystopian for my liking.
For "luxuries", e.g. pools/washing the car etc. then fine, but the baseline amount would need to be set to a realistic level (with plenty of buffer) to allow people to drink/cook/maintain personal hygiene without needing to worry about their bills.
I've already drunk 3 litres of water today, and that's just sitting around in the house trying to keep cool, for someone who is needing to work outside for example, that's going to be significantly higher.
My concern would be people trying to reduce their bills by not drinking enough, causing health issues and ultimately additional strain on the NHS