A study assessing the costs and benefits of the Sacramento Municipal Utility District annexing one or more of its three neighboring cities across the river?along with unincorporated areas of Yolo County?concludes that serving the whole area instead of its parts would be the most cost-effective option. The study by R.W. Beck, which was presented to the SMUD board January 20, evaluates the impacts of the muni taking over Pacific Gas & Electric?s service territory to the west in the cities of West Sacramento, Davis, and Woodland. If the whole study area were annexed, a base rate savings of 4.27 percent below PG&E rates was estimated, but the departing load would have to pay an expansion surcharge and exit fees, ranging between 0.35 cent\/kWh and 2.25 cents\/kWh. The cost of taking the assets via eminent domain in all three cities and unincorporated stretches could range between $56 million and $108 million. PG&E?s transmission system was categorized as ?undersized? and in need of upgrades estimated to cost up to $27 million. Upgrading the distribution system to meet SMUD?s voltage criteria would also be needed to the tune of $255,000. The SMUD board directed staff to review the study and analyze its costs and benefits from a district perspective. It should include how a partial or total annexation would affect SMUD resources, its long-term gas supplies and prices, and the muni?s renewables portfolio and customer mix. The review is expected to be completed by the end of March. The consultant also presented its annexation report this week to the city councils of West Sacramento, Davis, and Woodland.