California Code, Public Utilities Code - PUC § 6352

(a) Notwithstanding any other provision of law, a transportation customer who receives transportation service on a natural gas or electric transmission or distribution system, or both, subject to a franchise agreement executed pursuant to this division from an energy transporter shall be subject to a surcharge as defined in Section 6353. Notwithstanding any other provision of this chapter, no county shall impose a surcharge pursuant to this chapter in an incorporated area.

(b) Notwithstanding subdivision (a), the surcharge assessed for gas used to generate electricity by a nonutility facility shall be the same as the surcharge assessed for gas used to generate electricity by the electric utility for that quantity of gas described in Section 454.4. The surcharge amount for electricity shall not apply to the sale of electricity from a cogeneration or nonutility facility to an entity for resale to a retail customer.

(c) Nothing in this chapter permits a municipality to recover surcharges imposed pursuant to this chapter on the commodity cost of gas or electricity transported for transportation customers in addition to franchise fees calculated on the imputed value of the same quantities of gas or electricity. If a municipality has a franchise agreement with an energy transporter that requires the energy transporter to pay a franchise fee based upon an imputed value for the commodity cost of gas or electricity transported but not sold by the energy transporter, the energy transporter may apply the surcharge imposed by this chapter toward the amount of the franchise fee due under the franchise agreement.

(d) Nothing in this chapter shall in any way affect the rights of the parties to existing franchise agreements executed pursuant to this division that are in force on the effective date of this chapter.

(e) Notwithstanding subdivision (a), the surcharge shall not apply to corporations transporting natural gas pursuant to a “gas transportation only” agreement in effect prior to January 1, 1986.

(f) Notwithstanding subdivision (a), an energy transporter of gas that is required to obtain a franchise agreement with a municipality, and that is subject to the jurisdiction of the Federal Energy Regulatory Commission, shall not be required to collect the surcharge imposed by this chapter, but shall be required to negotiate with the municipality under the provisions of this division, franchise fees that recover amounts equivalent to those amounts that would otherwise have been recovered pursuant to this chapter.