Pub. Util. Code, § 785.7

(a) No gas corporation shall charge, directly or indirectly, a higher rate for the transportation of gas produced in this state than for the transportation of gas from any other source. No gas corporation shall require a producer of gas or a customer for whom any gas transportation service is performed to utilize the corporation’s services or facilities either to deliver gas from the producer’s facility to the corporation’s gas plant or to process the gas to render it compatible with the corporation’s gas plant.

(b) If a producer of gas or customer delivers to the gas corporation for transportation any gas requiring any processing service, including, but not limited to, dehydration, processing for extraction of liquids, or other purification, different from, or in addition to, that performed on other gas in the corporation’s gas plant, in order for that gas to be compatible with the gas plant, the gas corporation may impose a charge for any such service actually performed. If the gas corporation constructs new facilities at the request of the producer or customer exclusively to receive gas by the gas corporation’s gas plant, the gas corporation may impose a charge for the construction, operation, and maintenance of these facilities. The amount of the charge for the processing service or facilities authorized by this subdivision shall be established by the commission and shall be based on the actual expenses for the construction, operation, maintenance, labor, materials, and overhead involved in providing the specific service or facilities.

(c) For purposes of this section, “transportation” means the movement of gas from the point of receiving by the gas plant of a gas corporation to the point of delivery to the person or corporation for whom the transportation service is performed, including any related gathering or processing of the gas. The point of receiving by the gas plant is that point in the gas corporation’s existing plant which is nearest the source of the gas and which has receiving capacity, but does not include any new facility constructed by the gas corporation at the request of the producer or customer exclusively to receive that gas. The terms and conditions of receiving, for these purposes, shall be comparable to the gas corporation’s purchase contracts in the general area of the point of receiving.

(d) Subdivision (a) does not apply to exchanges of gas between a gas corporation and a producer of gas.

(e) The commission shall allow the gas corporation to fully recover all reasonable and prudent costs associated with ownership and operation of the gas plant used for transportation.