Editing Municipalization (section)

===Political/transaction costs===
The costs of municipalization tend to both front loaded and high. The largest costs come from the process of passing a ballot measure and acquiring the utility company. Although these many seem simple at face value these steps are often extremely costly and difficult because of the financial and political power that incumbent utilities possess. Still it is much more cost effective to purchase existing infrastructure in fact all processes of municipalization since the 1980s have purchased the incumbent utility assets.<ref name=":0" /> And the cost to the acquisitions has not been cheap, "most public power takeovers are in the vicinity of 140% of book value."<ref name=":0" /> Once the utilities have been acquired, local governments face the steep costs of financing the transition and developing the expertise to run a comprehensive system of electricity distribution as well as, in some cases, generation and transmission.<ref name=":1" /> The transaction costs are high, because cities must borrow to pay the IOUs for the power lines, they must develop the expertise and ability to manage a LTS, and they often face years of battles in courts and in elections due to challenges from the IOU.<ref name=":2" /> A study done by the Bay Area Economic Forum found that the key cost components that determine whether a new MU's rates will be higher or lower than the incumbent IOU's rates are: 1) "the combination of the income tax exemption and debt-only capital structure, both of which lower MU rates relative to IOU rates;"<ref name=":3" /> 2) "the premium over book paid for the distribution assets, which will increase MU rates relative to IOU rates;"<ref name=":3" /> and 3) "the MU's cost of generating or purchasing power, which is a wild card that could increase or decrease relative MU/IOU rates."<ref name=":3" />