First you need to create a market. Aka have multiple players. The network will be one(many) companies that will be bidding usage to wholesale companies. This(these) network companies will be using the proceedings to improve the network.

The wholesale companies will then have their own pricing strategy for the end customer. But they will be paying both the network operators and the local gov.

Since water is municipal resource, the players should be paying the muni/city/state for the resource they are utilizing. The proceedings will be used by the muni to maintain the water availability.