I've seen cases where the utility drop tension line/grounded conductor is snapped and there are still 120 volt circuits working properly in residences. I guarantee the neutral current was traveling thru the water pipe to the neighbor's and returning on their neutral.
Yes the plumbing system in each building would have to be isolated from the main system in order for this to work.
I think its a problem and have heard many stories from plumbers about faucets arcing. This also happens when the phone or cable company connects their ground on the load side of a dielectric plumbing fitting.
I am surprised we don't see more accidents. But electrical systems, even the oldest, are not that old, 70 or 80 years tops. The average is probably more around 50. As these systems get older and don't get replaced we may see an increase in injuries from these type of arrangements. If that happens the insurance companies will step in and get things changed.
Welcome to a reactionary society.
