Now that is some bullsheeet. What logic behind making rainwater collection illegal?
The rationale is that all those connected to the water system must share the cost in order to make it affordable to all as well as generate enough revenue for operations and maintenance.
If, let's say, 20% of customers suddenly stop using 90% of their former demand for city water, those lower bills affect the "collective" which has to make up the shortfall through rate hikes.
It's basically a Socialist model of compliance. All must contribute, or the system fails.
We see that in Hawaii with solar energy adoption. The more people install solar, the less electricity from the HECO/MECO/HELCO plants they use. The issue is, the power company can't just reduce their costs by reducing production. At night and on cloudy/rainy days, those customers will demand the same amount of power they did before they had solar. Hence, the power company must maintain the capacity to supply the solar-owning customers on their non-solar days/nights.
That means the power company has to charge everyone else more to offset the cost of energy production.
So, the rationale isn't inaccurate, but it does fly in the face of freedom and choice.