This paper first discusses the main impact that smart grid deployment has, in different respects, in smart cities and then presents a methodology for an extended CBA, able to go beyond the strictly financial aspects. It is based on previous developments at the European level.Smart energy and electricity networks are a crucial component in building smart city architectures; their consistent and harmonized inclusion in the smart city design should be carefully considered through a detailed analysis of the impacts (environmental, energy, economic, societal) and the implementation of cost benefit analysis (CBA), not only in terms of managing the grid itself but also in a wider perspective that includes environmental, security, and social aspects.The methodology conceptually illustrated can naturally be extended to the assessment of proposals for the development of smart cities.