Fees & public finance
Capacity charge
A utility's buy-in charge for water or sewer system capacity under Gov. Code § 66013, capped at the estimated reasonable cost of providing service.
Definition
A capacity charge is what a water or sewer provider charges a new connection to buy into system capacity — facilities already in existence or to be constructed that will benefit the paying customer. It is governed by Gov. Code § 66013, archived with the Mitigation Fee Act chapters but operating on its own track: instead of nexus findings, the statute caps the charge at the estimated reasonable cost of providing the service unless voters approve more, and requires the revenue to be held and accounted for in a separate fund.
Why it matters in an underwrite
Utility capacity charges can rival a city's entire impact-fee stack on a per-unit basis, and they are typically due at connection or permit — the § 66007 residential deferral does not rescue them. The challenge route is different and fast: facial attacks on a § 66013 charge run through the § 66022 procedure with a 120-day clock from adoption, so review the district's current rate study during feasibility, not after the will-serve conditions arrive.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.