Additional Information on 2025 Electric Costs

Tarentum Borough operates a locally owned and managed electric distribution system, continuing a proud tradition of municipal power in Pennsylvania that dates back to the late 1800s. Our focus is on providing reliable, cost-effective energy and reinvesting in the community. From purchasing wholesale power to maintaining local infrastructure, our priority is ensuring Tarentum residents and businesses benefit from stable rates, responsive service, and a strong local economy. Below, you’ll learn more about our history, regulations, current pricing, and the advantages of our public power model.

1. History of Municipal Electric in Pennsylvania

• Early Beginnings (Late 1800s–Early 1900s): Many Pennsylvania communities formed their own power utilities to promote economic growth and ensure reliable electricity.
• Tarentum’s System: Tarentum regained control of its electric system in the mid-1990s. Our Borough continues the tradition of local management, offering stable, cost-effective service to our community.

2. Regulations That Allow for Municipal Electric

• State Oversight: Pennsylvania Borough Code grants local governments the authority to operate electric systems.
• Federal Regulations: The Federal Energy Regulatory Commission (FERC) oversees interstate aspects of electricity sales, allowing municipalities to purchase power in the wholesale market.
• Compliance: All municipal systems must adhere to reliability, safety, and consumer protection standards at both the state and federal levels.

3. Major Components of the Electric Supply Chain

1. Generation: Electricity is produced through various resources (fossil fuels, nuclear, renewables). Tarentum purchases this power at wholesale from generation companies.
2. Transmission: High-voltage lines carry electricity from generation stations to regional substations. These lines are operated by transmission companies or regional operators.
3. Distribution: As a local utility, we deliver electricity from substations directly to homes and businesses, maintaining the poles, lines, and related infrastructure for reliable service.

4. We Are a Distribution Company Buying Power on the Wholesale Market

• Tarentum does not generate electricity; we focus on distribution.
• We purchase bulk power from a variety of wholesale suppliers—our mix may include coal, natural gas, hydro, wind, and solar.
• Our primary responsibility is to deliver power safely and reliably to our local community.

5. Recent Capacity Cost Increase

• What Are Capacity Costs? These are fees paid to ensure enough generation is available during peak demand. Even if power isn’t fully used, this cost secures the potential to meet demand.
• Recent Spike:
  • Capacity prices in the PJM region rose from $28.92 per megawatt per day to $269.92—a jump of over 800%.
  • Tarentum Borough’s cost to buy capacity will increase by an estimated $700,000–$900,000 annually for the same amount of electricity.
  • While this does not translate to an 800% increase on individual bills, it does raise wholesale costs significantly.
• Monitoring & Mitigation: We continuously watch market conditions to minimize impacts and keep rates competitive.

6. Comparing Our Prices to Neighboring Communities

• Competitive Rates: Municipal rates can fluctuate, but often remain on par with—or below—those of investor-owned utilities (IOUs).
• Benchmarking: We regularly compare our rates with surrounding areas to ensure transparency and affordability.
• Current Estimates (as of January 1, 2025):
  • Tarentum’s rates are comparable or cheaper than our regional competitors.
  • The 2024 statewide survey (not accounting for 2025 increases) supports this. 
  • Residential Increase: The upcoming rate increase is $0.018/kWh (around 11.8%). With an average usage of 670 kWh per month, the average monthly bill will increase by about $12.

7. Benefits of Public Power

• Local Control: Decisions about rates, reliability, and infrastructure are made by and for Tarentum residents—not by a distant corporate board.
• Customer Focus: We’re part of the same community we serve, so our customers are also our neighbors.
• Community Reinvestment: Revenue from our electric system goes back into Tarentum—for public works, code enforcement, police, parks, and more. About one-third of our general fund is supported by the electric system, enabling a higher level of local services.
• Reliability & Accountability:
  • We prioritize quick response and high-quality service. In the past three years, Tarentum has replaced approximately 60 utility poles, six transformers, and 100 meters.
  • We’ve expanded our communication efforts during outages and other system issues.
  • Typical restoration time for outages within Tarentum’s system is about 90 minutes or less.