Pingxi is the town that gives its name to the entire district. From Pingxi Train Station, you can walk to lively Old Street.
Although Shifen is the most famous town to throw the classic sky lanterns, in Pingxi it is also common. You will see that they are sold in many stores. You choose the type, you paint it with your wishes, and they take you to throw it on the train track. It is all very fun and photogenic. The lanterns are made of paper, with a bamboo structure and a candle that makes them fly. In principle, everything is quite sustainable, but the problem is that except for the weeks after the Pingxi Sky Lantern Festival, nobody goes to the forest to pick up the lanterns. In fact if you walk from Pingxi to Jingtong, you will see that the trees are full of lanterns... so if you do it (I think it is something to do once in a lifetime), it better be 1 single lantern for the whole family.
If you go with children, you can take a short walk along Pingxi Street to see the oldest mailbox in Taiwan, and a little further on to the left, the Eight Spirits Cave.