On the market, there are no shortages

Newmarket has a water shortage. To be clear, a shortage occurs only when there is a legal price ceiling that is below the natural, market price of water. As such, shortages are induced by governments. On the market, when the supply of a good is limited, its price rises and people conserve the good naturally. For some reason, this is considered evil (those nasty price gougers!), but it’s the only peaceful way to allocate goods. And, in fact, it is beneficial because a higher price will be an incentive for more producers to increase the supply overall. 

In the case of government-owned water, however, when there is a “shortage,” the residents are the culprits. They are the bad people who water their lawns too much or wash their gas guzzling cars, or whatever. It’s a bit odd how it is considered evil to charge a higher price for a good, yet it is not evil to prohibit, under the force of law, use of the good.  

See Murray Rothbard and Bob Wenzel on this matter.