Capistrano leaders a few years back investigated merging with other water agencies, and a bit of work was done in consideration of a possible deal with South Coast Water (which serves Dana Point). That deal, by the way, went south when it became clear Capistrano residents would pay much more for water because of SCWD concerns over infrastructure, among other issues.
At that time, however, a few criticized City Hall for not considering a private water supplier.
Here's a story today that highlights some of the reasons I'd heard why the council chose not to. (In a word, profit.)
According to the OC Register, the parent company of some private water suppliers reports double its profit this year -- and is asking for water-rate increases.