Rate Case Settlement on Fast Track

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The U.S. Postal Service's rate case settlement continued to move through the approval process with little opposition and likely will be approved, raising postal rates an average of 8.7 percent June 30.

"We still are on track to wrap up [the rate case] in a timely manner and still provide sufficient time for mailers so that the rates could be implemented without too much, or hopefully none, dislocation," said Ed Gleiman, the former Postal Rate Commission chairman leading the Direct Marketing Association's postal reform initiative.

The USPS and businesses, mailing organizations and others involved in the settlement discussions submitted procedural mechanisms and schedules for subsequent steps in the process by last week. Replies to a scheduling procedure filed by the USPS are due Monday.

The American Postal Workers Union was the only party to formally oppose the settlement proposal by the Jan. 16 deadline for filing objections. With just one group filing opposition, insiders say, the rate case appears certain of approval. The APWU can submit evidence on its objection until Wednesday. At that point, the PRC will decide whether to proceed with additional hearings.

The postal service has asked for a Feb. 8 deadline for filing written discovery to conduct oral cross-examination on APWU testimony. Hearings on rebuttal testimony would end by Feb. 25, and reply briefs are due to the PRC by March 4. Insiders said the PRC would probably agree to this motion.

If these dates stick, postal observers said, the PRC could rule on the proposed settlement by the end of March. The USPS Board of Governors would then vote on it.

"It's conceivable the commission could get a decision out by the end of March, but my guess is that it would be hard-pressed to do so," Gleiman said. "For example, even though there is a settlement, the commission is probably still going to have to address a number of issues in the case, which could take time."

Still, Gleiman said, mailers would have time to prepare for the new rates even if final approval from the board of governors did not come until early May.

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