Frequently Asked Questions
Tarentum Public Power
As one of only thirty-five Pennsylvania Boroughs to own and operate its own electric distribution system, many businesses and residents have questions about the business of public power. The information below is designed to help explain more about our service and your account.
Frequently Asked Questions
Electric rates are set forth by legislation of Borough Council. In December of 2018, Council established new rates for electric service. Ordinance #18-07 sets forth the rules and rates for electric service.
Rates are determined from a variety of factors. The Borough electric company must balance the needs of operational costs, infrastructure investment, future planning and other Borough goals outside of the electric company.
Borough rates are set using a flat dollar amount per kilowatt hour.
Electricity is first produced via generation. Once generated the current is transmitted through high voltage lines. Once the current reaches the Borough, it is then distributed throughout our own “grid” of lines, poles and transformers to your property. See below for more specific information on this process.
Like public schools and libraries, public power utilities are owned by the community and run as a division of local government. These utilities are governed by a local city council or an elected or appointed board. Community citizens have a direct voice in utility decisions and policymaking. Business is conducted in the open and citizens know where their power comes from and how and why decisions affecting their utility bills are made.
For Tarentum Borough, your local electric company is run by Borough Council through the Borough Manager. By voting in municipal elections, you have a direct say in who shall be responsible for running your electric utility. Whether you are satisfied or frustrated by customer service, rates or reliability of service, residents have the ability to cast a vote for those folks who operate your public power company.
This is quite the contrast from an investor owned utility which is subject to the regulations of the Pennsylvania Public Utility Commission (PUC). The PUC is an $80,000,000 government entity which operates to balance the needs of consumers and utilities. For Tarentum, the role of the PUC is administered by Borough Council. It is your elected officials who balance the needs of the public power company with the desires of its customers.
Under the regulatory model, citizens do not have direct control over the operation of the utility company itself. Citizens cannot elect members of these companies or commissions to enforce rules, rates or policies that they wish to see.
In our Borough, you can elect a council member who shares your beliefs. You have the ability to run for Borough Council yourself, and be a part of the management, operation and execution of the power company. The same cannot be said for investor owned utilities. With the utility based at the local level, the customer can have more direct control and impact on the direction of the company. You can attend monthly public meetings to learn more about your public utility and engage those who are in charge of its operation.
More information can be found at the American Public Power Association website.
No. Tarentum Borough is one of thirty-five Pennsylvania Boroughs to own and operate its own electric distribution system. Nationally there are over 2,000 public power entities which serve over 49 million people.
More facts and information can be found at the American Public Power Association website.
Generally speaking, public power is able to give back to its community in a number of ways. Depending on how the company is structured, there are many benefits to derive from a municipal power company.
In Tarentum Borough, we purchase electricity at wholesale cost from a supplier, no different than an investor owned electric utility company (i.e. West Penn Power – First Energy). Currently, our electric supplier is PSE&G. By purchasing wholesale, we are able to acquire electric at market prices. In turn, we then sell the power to our customers (residents and businesses). However, unlike investor owed utility companies, we are not subject to many regulations that drive up the cost structure. Additionally, our residents are not taxed for their electric use or consumption.
With this framework in place, public power companies can usually offer lower rates than investor owned utilities. Not all do. Tarentum chooses to keep rates in line with the investor utilities. There are several reasons for this.
The rate payer in Tarentum essentially pays the same amount as they would in a neighboring municipality. The difference is that the Borough uses the additional revenue to accomplish goals set forth in the General Fund. Whether it be the repair of a street department vehicle, investment in to a community park, or purchase of police department equipment, the benefit derived from our public power company assists the Borough as a whole.
The Borough could choose to keep electric rates lower than those set by surrounding electric companies. Of course that would be desirable to any rate payer. However, to make up for the missing source of revenue, property owners would likely see an increase in their taxes.
To put this concept in to perspective, in the 2018 budget the Borough planned to transfer $500,000 from the electric proceeds to the General Fund. As a comparison, the Borough property tax rate of 5.48 mills generates roughly $500,000 annually. Essentially, in order to make up the difference, property taxes would have to immediately double toward the range of 11.0 mills in order to net the same amount of revenue.
While this is not a comprehensive analysis of the rates and structure, it does highlight the current make up of the Borough electric business. Clearly there are policy decisions which could impact the above analysis, but for purposes of a simplified FAQ, this is a general overview highlighting some of the benefits of the Tarentum electric system.
In areas which have investor owned electric companies (i.e. West Penn Power – First Energy), you can choose the company that generates your home or business’s electricity — also known as your electric supplier. This means that you have the power to choose to switch to a competing supplier that can offer the lowest price, best price or provide a specific service you want, such as green/renewable energy.
Please note, the choice of electric supplier is different from your electric distributor. Distributors are those that deliver your actual energy, while suppliers are those that sell you your electricity. You do not have a choice of distributor.
On your investor owned company electric bill, you may see two sets of charges. It is important to understand that these two sets of charges combine in to one full bill. Please see the billing comparison page for more information.
If you reside in Tarentum Borough, you purchase electric from our public power electric department. We are both the supplier and the distributor. The fee that you are charged encompasses both the supply and the distribution. You do not have a choice regarding your electric supplier because the Borough purchases that supply wholesale from the market. While you do not have a choice of supplier, you do have the benefit of being in a public power municipality which offers low, competitive rates.
Many times we receive feedback that customers who used to live in other regions only pay $0.05 to $0.06 cents per kWh for their electric supply. That may be true. However, that likely does not include the distribution fees as well. A quick glance at an old bill may not reveal the actual cost of your former electric service. We encourage our residents to examine the rate comparison page which will help folks understand their bill and compare it to an investor owned utility company bill.