My friend Steve has been avidly reading on water policy, and has turned me on to some interesting reading- such as the book Cadillac Desert, which chronicles our disastrous western water policy.
Another great read is the Aguanomics blog, by economist David Zetland. He's a free-market economist, and lately, he's been showing example after example of how the government monopoly utility method of water allocation is ensuring environmental disaster. He believes markets would inject higher prices, which would be a good thing, for it would cause people to be less wasteful and more judicious in their water usage.
The link has been added, at the right.