Article 2. General Provisions of California Public Utilities Code >> Division 1. >> Part 4. >> Chapter 1. >> Article 2.
The purpose of this chapter is to do all of the following:
(a) Promote, foster, and encourage the intelligent and orderly
marketing of gas through cooperation.
(b) Make the delivery of gas from producer to distributor as
direct as can be efficiently done.
(c) Free producers from unreasonable constraints imposed by
limited access to market.
In enacting this chapter, the Legislature finds and declares
(a) California gas production is an important part of the state's
(b) The actual delivered cost of California produced gas is
presently lower than the cost of alternative out-of-state and
Canadian gas supplies.
(c) California gas is produced and made available by California
businesses and California taxpayers employing California workers.
(d) California gas consumers are entitled to a "least cost supply
mix" in the gas supplies made available to them for purchase.
(e) California consumers and California producers of gas are
entitled to be free of artificial constraints and unreasonable
burdens on the marketing of California gas at a fair price.
Associations are "nonprofit," since they are not organized to
make profit for themselves, as such, or for their members, as such,
but only for their members as producers.
Any provision of law which is in conflict with this chapter
does not apply to any association.
Any exemption under any existing law which applies to gas in
the possession, or under the control, of the individual producer,
applies equally to gas in the possession, or under the control, of an
No person, corporation, or association, that is hereafter
organized or doing business in this state, may use the word
"cooperative" as part of its corporate name or other business name or
title for gas producers' cooperative marketing activities, unless it
has complied with this chapter.
Any person, corporation, or association which is organized
pursuant to any previously existing statute for the purpose of
cooperatively selling gas is deemed to be organized and existing
pursuant to this chapter, and this chapter applies to that person,
corporation, or association.
An association is not any of the following:
(a) A conspiracy, a combination in restraint of trade, or an
(b) An attempt to lessen competition, to fix prices arbitrarily,
or to create a combination or pool in violation of any law of this
(c) A public utility for any purpose under Part 1 (commencing with
The marketing contracts and agreements between an association
and its members, and any agreements authorized in this chapter, are
not illegal, in restraint of trade, or contrary to any statute which
is enacted against pooling or combinations.
The General Corporation Law (Division 1 (commencing with
Section 100) of Title 1 of the Corporations Code) applies to each
association which is organized pursuant to this chapter, except where
this chapter provides otherwise. For the purpose of associations
organized without shares of stock, the members are deemed to be
"shareholders" as the term is used in the General Corporation Law.
It is an unfair trade practice, and unlawful, for any gas
corporation to do any of the following:
(a) Interfere with, restrain, coerce, or boycott any person
engaged in the production of gas within the state in the exercise of
any right described in this chapter.
(b) Discriminate against any person engaged in the production of
gas within the state with respect to price, delivery, or other terms
of purchase of gas by reason of membership in or contract with any
association formed pursuant to this chapter.
(c) Pay or loan money or give any thing of value as an inducement
or reward for refusing or ceasing to belong to, or for breaching one'
s membership agreement in, an association.
(d) Maliciously or knowingly give false reports about the
finances, management, or activities of any person subject to this
(e) Refuse to negotiate or bargain at reasonable times and for
reasonable periods of time with a genuine desire to reach agreement
and a serious attempt to resolve differences with an association for
price, terms of sale, terms of transportation, compensation for gas
produced under contract, or any other contract provision relative to
gas production represented by an association, except that nothing in
this subdivision requires a gas corporation to reach agreement on
price, delivery terms, transportation terms, compensation, or any
other contract term.