I think this is completely okay, though. The process goes like this:
...the Orange County government [takes] sewer water and, instead of dumping it into the ocean after treatment, clean[s] it a second time using technology that renders the water almost distilled, exceeding all state and federal drinking standards, officials said.
The water then goes from the new $480 million water plant in nearby Fountain Valley to the drinking supply that lies beneath Anaheim—percolating many months through the earth into an aquifer serving 2.3 million people in 20 cities.
The process departs from the routine: Treated sewage typically is returned to the environment at large, such as in rivers and lakes, and after it dilutes in the vast bodies, the water is reharvested. The Orange County process skips the return-to-the-great-outdoors step.
Hmm, sounds clean to me. And really, steps like this are going to be needed to meet the West's and the world's growing water shortages. The New York Times recently had an informational rundown of the dire situation the American West is facing in regard to water. It notes,
...a lesser Colorado River would almost certainly lead to a considerable amount of economic havoc, as the future water supplies for the West’s industries, agriculture and growing municipalities are threatened. As one prominent Western water official described the possible future to me, if some of the Southwest’s largest reservoirs empty out, the region would experience an apocalypse, “an Armageddon.”
Take the time to read the NYT article as it will certainly make you think twice about the water you use. But most of all, it made me realize how valuable water is. So, I've decided to invest some money in 'water resources' stocks. Stocks from the sort of company who built this new sewage water recycling plant. Will people be willing to drink this water? Would you?