This is from the applicant manual for last year:
"Applicants with a completed graduate degree will have their overall GPA from their graduate program used as equivalent to one year of undergraduate GPA for the purposes of calculation. In the event that an application has multiple years with graded courses within their graduate program, the graduate degree GPA will be calculated using the weights of the individual courses."
Its a very confusing statement to me as both sentences seem to say the same thing but point to 2 different calculations.
In your case, I would assume that they would take all the grad courses, average them, and then consider it as one year of UG GPA. So if you had 4 years of UG when you graduated, they would take the best 3 (dropping the worst) and then add the Grad GPA as another year (total of 4).
I would email them of course just to be sure...