>This comes with costs like running higher than you can actually charge for so you don't get outages, employing a lot of people for emergency response and storms, etc.

That's an interesting point. During/after the worst of the recent California drought years, some water companies had to raise their rates because people were so good at saving water. Because so many of the utility company's expenses are fixed costs, their savings from not distributing as much water weren't proportional with their reduction in revenue.