PRC Chief Takes USPS to Task Over Anonymous Memo

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It seems that a rate increase for Standard A mail still is inevitable despite the fallout from a postal employee's memo disclosed by Postal Rate Commission chairman Ed Gleiman.

According to a transcript of last month's PRC hearing, the four-paragraph unsigned memo was attached to papers that the postal service submitted electronically to the PRC as part of its testimony.

The memo, titled "Docket R97-1 Revenue Requirement Updating Strategy for Rebuttal Testimony," said that the postal service is planning to give the PRC selective financial data to support its proposed rate increase. The USPS is asking the PRC to endorse a rate increase averaging 4.5 percent to raise $2.4 billion in revenue, despite reporting a $1.3 billion profit this year.

The dispute stems from a paragraph that says the postal service needs to give the commission "updated information on cost increases to offset the decreases included under [the first paragraph of the memo]," which includes cost changes for known, quantifiable, actual events that have been raised on record.

According to testimony, Gleiman said to Richard Porras, USPS vice president and controller and a witness at the hearing, "It seems that this strategy document is advising that the postal service should include in your testimony selected lists of revised cost estimates that are within control of the postal service to offset known and generally uncontrolled cost decreases. It doesn't say find all of the increases and all of the decreases. It says find enough to offset. That's fairly plain English where I come from."

Porras, who said he hadn't seen the memo, replied: "We were looking [to see if we] have any particular costs that were majorly going up. We weren't trying to go through every single line item."

In a written statement, Porras maintained that the full rate increase is necessary and that it would be unwise to recalculate all of the changes that have occurred since the case was filed. The net effect of the changes would be a $195 million decrease in the postal service's projected expenses.

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