Efforts by the Sacramento Municipal Utility District to take over electric service in Yolo County received preliminary approval from the California Public Utilities Commission November 18. The week before, Pacific Gas & Electric sued SMUD to hold on to those customers. The state regulators' decision passed unanimously with no public discussion. "The CPUC vote was no surprise," said PG&E spokesperson Jann Taber. The utility filed multiple objections, asserting the annexation would "Balkanize" the grid. It also claimed the estimated $53 million per year in lost billings would burden the 5 million ratepayers remaining within the investor-owned utility's service area. The CPUC disagreed, stating the annexation "will not substantially impair PG&E's ability to provide adequate service at reasonable rates within the remainder of its service territory." PG&E filed suit in Sacramento Superior Court November 10, accusing SMUD of trying to take over service in the cities of West Sacramento, Davis and Wooldand and Yolo County without required environmental review (Circuit, Nov. 18, 2005). If the suit proceeds, it could derail SMUD's effort to get the Yolo annexation on the ballot in the affected area for the November 2006 general election. SMUD general counsel Arlen Orchard called the suit "a stalling tactic." He added, "PG&E thinks if we can delay this for two years, we'll lose the momentum." The suit comes down to an argument over the timing of the environmental review. Both SMUD and PG&E agree that review will have to take place. Orchard said he expected SMUD to take part in environmental review with the Sacramento County Local Agency Formation Advisory Commission, as the lead agency. LAFCO is currently reviewing the annexation. PG&E says the review should have been conducted before SMUD made any decision. A private utility would not have to conduct its review so early, Orchard countered. But the suit says that SMUD is a "special district," a type of public agency. Public agencies are required to conduct environmental review before making any discretionary decisions that could have significant impacts, asserts PG&E. The suit also contests the LAFCO's stated plans to conduct a program-level environmental review, rather than a detailed, site-level review. Under California law, policies usually go through a program-level review before approval, with a site-level review coming later. The suit, however, says that without a detailed review, Yolo County voters will be unable to make informed decisions. Hearings in the case had not been scheduled at press time. Orchard said LAFCO expects to make a decision scheduled in May or June, 2006. If the decision comes that quickly, the annexation would appear on the ballot in the November, 2006 general election.