PRC Starts Rate Case Talks

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The Postal Rate Commission, the oversight board of the U.S. Postal Service, began its formal evaluation of the proposed rate case Wednesday, meeting with 70 postal officials and participants during a pre-hearing to outline the proposal and discuss procedures and schedules.

While rates increase regularly every few years, many mailing groups are particularly incensed with this year's proposal, which was filed with the PRC last month and asks for increases of 15 percent or higher for many types of mail categories by January 2001.

Immediately after USPS' request, interveners began submitting questions to the agency about its proposal through the PRC. So far, more than 70 organizations and companies have requested to intervene.

Specifically, the PRC is in the discovery phase of the proceedings, in which parties query USPS witnesses with written testimony. The discovery period ends March 23, at which time the USPS must have its answers ready as well. In early April, the postal service presents its case at a public hearing. In May, interveners begin filing their evidence - and by September, they must submit their final trial briefs. At this time, the PRC will prepare its recommended decision decision by Nov. 13.

Controversy surrounding the rate case has already begun. Earlier this month, the PRC asked postal officials to explain why they relied on 1998 financial data to support the proposed rate increase instead of using fiscal 1999 information, which it noted ended four months before the USPS filed its increase proposal.

The commission noted that the USPS is required - by law - to use the total actual accrued costs during the most recent financial year for which they are available "as a base year for its [needed revenue] projections." In using the 2-year-old data, the USPS has failed to take into account the actual effects of last year's rate increase, the PRC said.

However, the USPS said this week in a status report that it can provide unaudited 1999 financial data in late March and an audited report by mid-April, when it is scheduled to testify at the rate case hearings.

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