In the coming years the price of water will change considerably. You probably wont regret installing a rainwater harvesting system. Also, there is a way to finesse the wasted water that goes down the drain in the shower back into your toilet tanks.
There's a (relatively low) upper bound on the price of water based on cost of desalinating water (turning ocean water into drinkable water).
It looks like, today, water desalination can be done for about a $1000 per acre-foot, which is only ~40% more expensive than current prices (http://online.wsj.com/article/SB120053698876396483.html?mod=...). Granted there aren't desalination plants everywhere - but in the event of a serious water shortage many would quickly be built.
40% sounds like a lot, but water accounts for such a small percent of most people's current expenses, that it's practically negligible.
Current per capita total water use in the USA is about 180 gallons per day. That means switching to all desalinated water would cost less than $70 extra dollars per year per person.
Desalination is very energy hungry. with Oil possibly going up 100% (if Libya and Tunisia both stop providing oil), it could easily be 200% higher than current prices for water. But it would still be small compared to other expenses - by your calculation, by ~$300/year. Something you'd start to feel (but then, everything would shoot up in price)
There's something wrong with those numbers, at least on an "as delivered" basis.
Water on the Monterey penisula is already several times as expensive as San Jose's. Neither one uses de-salination.
The Monterey peninsula is adding some desalination and the projected cost for all water is double the current cost. (Does anyone think that the projection will turn out low?)
