Running a copper pipe from the water meter to the water heater does not provide a ground for the electric service. If the water service is non-metallic, one could use the rebar of the foundation for the Grounding Electrode (Mandatory in the '05 NEC) for new construction, or a made electrode consisting of one or two rods for other than new construction. The metal pipe installed in the interior of the building must be bonded per 250.104(A) but it is not the grounding electrode.
