Infrastructure Growth Charge (IGC)

The IGC applies to all property owners or developers applying for new connections to our networks are liable for the IGC.

Examples include:

• Connecting a new property to our network

• Connecting a new dwelling on an existing property

It also applies to existing commercial customers who increase demand for water and wastewater.

Apply to increase demand

The IGC is applied whenever a property owner or developer adds extra demand on our networks. Typically, this occurs when:

• A new property connects to our network

• A new habitable dwelling on an existing property connects to our networks. If the dwelling is less than 65 sqm or less, you may be eligible for a reduced rate

• An existing commercial property increases (or expects to increase) its water use. 

View current IGCs

Charges vary for stand-alone non-metropolitan networks where past and future investments are specific to each network. These investments are divided by the capacity created to determine the IGC. Each investment will be different, depending on the scale and timing of development and how we provide the service.

To calculate the charge, we follow these steps:

1. We consider the amount we will invest in growth-related infrastructure over a 15-year period (four years historical, current year, 10 years forward)

2. We divide the amount we expect to invest in growth-related infrastructure by the number of properties we expect to connect

3. When our current customers pay for their water and wastewater services, they are paying for three components: operating costs, depreciation and finance costs. This step is to calculate the net present value of the depreciation and finance portion of money we will receive from water and wastewater charges over an average asset life

4. We reduce the total cost of delivering growth-related infrastructure to a property by the net present value of future interest and depreciation payments, paid through ongoing water and wastewater charges. This ensures the developer is not charged twice for the same asset

However, currently we only charge a portion of the cost of growth-related infrastructure rather than the full amount that can be recovered by an IGC. Our intention is to increase our IGC over time to recover more of the cost of growth-related infrastructure from the growth community. We recognise the need to balance our intention to align the costs and benefits of growth-related investment with the broader public good it generates.

The person or organisation that owns the property at the time the demand for services (new or additional) is required is responsible for paying the IGC.

If you employ someone to build your house, you are still responsible for paying the IGC as you own the land when it is being developed.

A Development Unit Equivalent (DUE) is the unit of demand we use to calculate IGCs. For water supply, one DUE is 220 kilolitres of water
use per year. For wastewater, one DUE is 209 kilolitres of wastewater discharge per year. For example, if a property connects to our network for the first time and they estimate their water demand to be 2,200 kL/year, this equates to 10 DUEs.

A baseline (or baseline demand) is the level of annual demand that a commercial property is entitled to use over a 12 month period. If this baseline is exceeded, you may incur additional IGCs relative to your increase in demand above this baseline.
 
Every commercial property connected to our water and/or wastewater has a unique baseline. To find out how baselines are determined, refer to Page 8 of our customer contract.

You will not be charged an IGC if you have paid a water and wastewater development contribution to the council.

IGCs were introduced on 1 July 2011. If you paid a development contribution to the council before then, it may have provided for water and wastewater infrastructure. This means you will not have to pay an IGC unless the scale or intensity has increased since the original contribution was paid.

When you apply to us for a new connection, we ask if you believe a development contribution has been paid. We will confirm with the council whether a development contribution that covers water and wastewater infrastructure has been paid in the past.

No. A connection charge covers the cost of our crew visiting your property and connecting your pipes to ours.

We will require full payment from most customers before we provide a connection. However, for developers who are building on a large scale with staged developments we can consider staged payments.

An IGC is not refundable but it doesn’t disappear either. If you’re redeveloping a site and demolish part or all of the existing buildings, any IGC or development contribution for water and wastewater paid previously (even by the previous land owner) will be used as a credit towards the redevelopment.

The IGC is a one-off charge unless you intend to use more water or connect more dwellings to our network.

For example, if you have a factory and increase your water use, you will need to pay an IGC to cover the increased demand that your factory puts on our infrastructure (even if you don’t need a new connection).

Apply to increase demand

If only wastewater services are available on your street and you have to install a rainwater tank, you will be charged a wastewater only IGC. You can find the IGC applicable to you here.
 
If both water and wastewater services are available on your street, you will be charged the full IGC regardless of installing a rainwater tank. While you may think a rainwater tank will reduce demand on our network, unfortunately it does not reduce the money we must invest in infrastructure. We have to provide infrastructure to accommodate peak demand. Typically, this occurs when rainwater tanks are empty and people rely on our supply – either through their own mains connection or through water tanker operators who source their water from us.

If both the water and wastewater networks are available in your street, you will be required to pay a full IGC.

If only the water or wastewater network is available in your street, you will be required to pay for the service that is available. In the metropolitan area this is half the standard IGC.

You may be eligible for a reduced rate if you are building a residential unit that is less than 65 square metres.
 

If you are a commercial customer your IGC will be calculated on the volume of water you expect to use. Therefore, if you install water saving devices that will reduce your water demand, it will reduce your IGC.

Yes, the IGC contributes towards the capital investment of bulk infrastructure. These are not the assets which are built to reticulate developments or to connect developments to Watercare’s existing networks.

In November 2010, the city and district councils across the Auckland region merged into one; Auckland Council. As part of this amalgamation, Watercare took on the management of water and wastewater services for Auckland. The IGC was introduced in 2011 to replace the charges and rates charged by the former councils or their water suppliers to cover the costs of bulk infrastructure investment.

When Watercare took over charging for Auckland’s water and wastewater services in 2010, we inherited a pricing regime which did not reflect the true costs to cover Auckland’s development and growth.

Watercare’s only funding sources are from customer charges so we must recover all our costs. The IGC to connect to our services should reflect the cost we incur for providing that service. Since 2010, we have been progressively shifting the cost of growth to IGC, rather than seeing larger increases in the water and wastewater charges for all our existing customers.

 

Bulk infrastructure refers to treatment plants, large pump stations and transmission pipes.

Yes.  You can request that we reconsider the IGC you have been charged. You can also lodge an objection to the IGC you have been charged, which will be heard by independent IGC Commissioners.

Read the Charter for Commissioners.

You cannot use an objection to challenge the content of the IGC terms and conditions. Click here for our customer contract.

Requesting a Reconsideration or Objection factsheet

Download Request a Reconsideration or Objection form

IGCs are assessed for properties with laundromats under the same process as any other commercial customer. However, operating a laundromat can cause significant increases to annual water demand. That’s why we’ve made improvements to our process to ensure a fair outcome for our customers and the industry. Click here to find out more information about IGCs for laundromats.