"water bills"?
I think "water rates" with the same meaning as "water bills" is common enough in the UK anyway.
Hmm, I could see it in the sense of "what are the water rates?", but "default on my water rates" sounds strange to me.
Google on "pay the water rates". IMO, 'rates' are used because (traditionally) water was provided by the government. Private companies have bills that need to be paid, public facilities are funded by rates.
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