**PRC Will Re-Examine Recommended Decision

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The Postal Rate Commission will reconsider its recommended decision on the R2000-1 rate case as per a request by the U.S. Postal Service's Board of Governors earlier this month.


The USPS' comments to the PRC are due Jan. 3. Other participants' comments are to be submitted by Jan. 24. The final USPS response will be due Jan. 31.


The USPS may already have prepared much of the analysis needed for the initial comments. If the USPS provides its initial comments by Dec. 20, the deadline for participant comments will be Jan. 12, and the deadline for the final postal service response will be Jan. 19.


The board allowed, under protest, the overall 4.6 percent postage rate increase recommended by the PRC.


While the board backed the 1-cent increase for the price of a First-Class stamp, it said other new rates would not raise enough revenue to cover rising costs.


The board sent the case back to the PRC for reconsideration of the decreases in the revenue request, which the commission submitted in November. The PRC cut the agency's contingency request from $1.7 billion to $1 billion and reduced proposed increases in several mail classes.


The governors asked the PRC to restore most of the $1 billion that was cut.


In addition, the board protested that rates should be increased to account for increased volumes of heavier First-Class mail; to correct a perceived error in the computation of bound printed matter rates; to offset revenue lost if nonprofit Standard-A mail rates are reduced as a result of a bill passed in Congress shortly before the PRC's decision was introduced; and, possibly, to allow for a reduction in certain Parcel Post surcharges.


The PRC said it would review the record and the legal standards applicable to each issue. The first step will be to call on the USPS to provide detailed statements on each issue. Other participants then will have an opportunity to provide their views. Finally, the USPS will be given a last opportunity to respond to arguments by other participants.


The PRC, however, appears to be sticking to its plan.


In a speech to attendees at the Graphic Communications Association's 2000 Rate Case Conference in Chicago earlier this month, PRC chairman Ed Gleiman said, "You have already heard the doom-and-gloom projections about USPS finances generally and about this recommended decision not providing the postal service with sufficient revenue to break even in the current fiscal year.


"But think about this: If rate increases are implemented in January -- which the service has indicated is likely -- and the service's best estimate from just this past July is on target, the postal service should be sitting on a sizable cushion at the end of this fiscal year."
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