Most California utility districts do have tiered prices, but the first tier is usually pretty large, the marginal prices are really low, and the national press has a tendency to characterize even this mild scheme as "rationing" so people hate it.
As an example, LADWP charges a maximum marginal rate of 17¢/gallon. You can use as much as 650 gallons per day without hitting this rate. The basic rate is 3¢/gallon.
My water district (in California), sent out mailers a few years ago explaining their new rate structure. They said people were "conserving too much" that the fees were not covering infrastructure maintenance costs. So, they lowered the price of water and set a base fee (charged whether you use any water or not) to $54/mo.
My original comment didn't make a value judgement on the rate restructuring, but it is true that I think the rate restructure was short-sighted. By lowering the per unit cost of water, they are discouraging conservation. And, the base fee is quite high for even our median wage earning households.
I believe it would have been better to have a lower base fee that does not, alone, cover fixed costs and make up the deficit by higher fees on those with high water consumption by maintaining a high per-unit water charge. The problem with this is that by not fully covering the fixed costs with the base fee, there will be seasonal variability in funding, but basic budgeting would mitigate that. And, GGP's point about such policies dishonestly being framed as, "rationing" by opponents.
As an example, LADWP charges a maximum marginal rate of 17¢/gallon. You can use as much as 650 gallons per day without hitting this rate. The basic rate is 3¢/gallon.