Same where I live, in California. One of my coworkers wanted to get a permit for a well, and the county's policy was to make the permit as expensive as running a water main to the property, making it always cheaper to subsidise their water infrastructure than to build your own.
Keep in mind that I'm in the part of the state that is extremely wet, where aquifers fill faster than agriculture can use it, and residential use is a literal drop in the bucket, compared to agriculture use. Most of Californias resevuoirs are built for flood control, with power generation as an added benefit, and shipping water off to the drier parts of the state as an afterthought.
In rural areas, people often directly support each other to get buy, and the urbanites absolutely can't stand it when they aren't relying on the urban fifedom. Just like the area in Colorado that the article discusses, it's illegal here to share well water. They've also made it illegal to pool your trash together for a dump run. Until the state stepped in, it used to be illegal to collect your own rain water, too. The same for inlaw quarters, which are really common in rural areas. (My county once spent nearly half a million, to unsucsessfully sue a group of people for a fraction of that amount, because one of them sold his land to the others, who each custom built their own houses, instead of having a county-approved developer build all of them.)
Even a few decades ago, California used to be the place for antiestablishment types, even in the urban areas, and its sudden changeover to forced top-down management has created a somewhat splintered government that alternates between extreme limits and strong reforms.