Tarentum to pay less for electricity, but residents won't see savings on bills

Tarentum will pay about 21% less for electricity in a new, four-year supply agreement, but residents won’t see any change in their bills, according to borough Manager Michael Nestico.

The borough owns and operates its own distribution system and buys electricity from a supplier.

Borough Council approved an agreement with PSEG Energy Resources & Trade, its current supplier, that starts on Jan. 1, 2021 and runs through Dec. 31, 2024.

The rate in the new agreement is $30.35 per megawatt hour. The borough is now paying $38.52 per megawatt hour under a two-year deal that started Jan. 1, 2019, and runs through Dec. 31.

Despite the decrease in what the borough pays for electricity, residential and commercial customer rates will remain the same, Nestico said.

“The power supply rates in this contract are only a portion of our overall cost to purchase wholesale electric,” Nestico said. “We also have other distribution, load and transmission fees which are paid separately from this.

“Those numbers can fluctuate, but are generally in the range of an additional $20 per megawatt hour in addition to the PSEG rate,” he said.

Residential customers pay 12 cents per kilowatt hour. The rate was last increased in the 2019 budget. It previously had been 11.34 cents per kilowatt hour.

Tarentum supplements its general fund budget with money from its electric fund. For 2019, the borough transferred $975,000 from the electric fund to the general fund. The 2020 budget calls for a transfer of just over $1 million, Nestico said.

“It blends into the general fund expenditures to assist with things like the demolition projects or infrastructure improvements,” he said.

Money from the electric operation has helped keep property taxes down, officials have said. The borough’s property tax rate is 5.48 mills. It has not been increased since at least 2007, according to the borough’s tax office.

Nestico said residents will not see any other changes or impacts from the new supply agreement.

The borough received one other, higher bid for electricity. Nestico said BP Energy’s proposed rate was $32.91 per megawatt hour, about 8% higher than PSEG.