Sunday evening's outage affected 5,200 customers, had police manually directing traffic, and forced a casino hotel tower to use an emergency generator.
An Atlantic City Electric spokeswoman says the balloons became entangled with part of a major feeder line, causing a power surge that triggered a system shutdown around 5:30 p.m.
The spokeswoman says crews made the appropriate adjustments and the power came back on at 8:39 p.m.
The Press of Atlantic City reported congregants at a Presbyterian church who had been singing Christmas carols simply carried on with flashlights and candles.
Information from: The Press of Atlantic City