It's the same as ordinary water.
Municipal simply means controlled by the local authority - the local council. In the UK, before the water industry was fully privatised, many councils were responsible for supplying the water in their local area, though there were also some private water companies even then. In municipally-controlled areas, residents paid for their water supply (and maintenance of sewerage etc.) with their local council's taxes, then known as 'rates'. The term 'water rates' was used for this charge and it was based on the rateable value of property in the same way that the house rates were.
Since privatisation, water companies have taken over all responsibility for water supply.
My late father was in charge of our local council's water rates office for many years.
· 8 years ago