PUC § 10213

The permission shall provide that if any district or public corporation is formed or extended, and if the district or public corporation can conveniently serve the territory with gas or water, any permission granted to any public utility, private corporation, or individual may be terminated by the legislative body. If permission is so terminated, the legislative body may grant permission to use the work or improvement and furnish gas or water to such district or public corporation in the manner and under the limitations provided in this article.