I think it makes sense to have a continuum of:

1. You're thirsty and need a sip of water? That should be free

2. You're an household and use water? That should cost progressively more the more you use if you use more than typically needed

3. Your business model requires you to evaporate every last drop of water in a desert region? That should be so prohibitively expensive that your business model does not work

This is basically just a low amount threshold and a exponential function. You just need to select the exponent.