For-profit companies getting control of a natural resource -- in this instance, water -- and then selling that water to citizens at a profit is the purest example of where "privatization" can lead.
Aqua North Carolina Inc., which sells water to some 72,000 customers in North Carolina (and sewer service to 15,000) must pass rate increases through a mostly compliant NC Utilities Commission. Aqua NC Inc. asked for a rate increase in 2008 and got it. No prob. It's asking again, and citizens in Lewisville, northern Davidson County, and Clemmons are beginning to wake up to the clear downside of a for-profit monopoly holding their right to a drop of water.
Municipalities sell water, too, of course, but not for profit. They set their rates to cover the costs of supplying the water. Private water companies set their rates according to what the traffic will bear, and what a go-along Utilities Commission will permit.