This doesn't make sense.
Why would "the water people" be anywhere near the location that you describe? The utilities property ends at the meter and your uncle's property is all of the rest, including the water that he purchases from the utility. As long as he's paying the bills there really isn't much they can do, legally, and they really shouldn't care.
As to the cost you describe for installing pipe several hundred feed, to say nothing of the connection cost: you are laughably low.

