PRC proposes ratemaking regulations

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The Postal Regulatory Commission has published proposed regulations to implement a modern ratemaking and classification system for market-dominant and competitive mail products.

Comments to the proposed regulations are due September 14 and reply comments are due by September 28.

"This is the third in a series of orders designed to establish regulations implementing a modern system for regulating rates and classes for market dominant and competitive products," the PRC proposal says. "In response to those earlier orders, the commission received more than 100 comments from interested parties. The commission has reviewed these comments carefully. They have been useful in clarifying the commission's analysis.

The proposal says that early implementation of a ratemaking framework prior to the statutory deadline will allow the USPS to use new, streamlined procedures to initiate rate (and class) changes as needed to respond to its financial needs and market conditions.

"The commission hopes that establishing the new system quickly will allow the USPS to operate with the flexibility envisioned by the [Postal Accountability and Enhancement Act]," said Dan G. Blair, chairman of the PRC.

Commenters told PRC that the regulations may serve as a safety valve, providing an immediate means to address challenges faced by the Postal Service and perhaps prevent the necessity for rate relief through a compilation rate case under existing procedures. They urge that this type of filing be avoided.

The PRC plans to dedicate more resources to implementing other aspects of the reform legislation.

"The commission's goal is to make this new system of rate adjustment advantageous for all stakeholders, enabling the Postal Service to price its own products, ensuring the lawfulness of competitive rates, providing increased transparency, and maintaining universal service at affordable rates," the document said. "Fulfilling these objectives requires that competing interests be carefully balanced.

In identifying specific market dominant products, the PRC has determined that for reasons of accuracy and expedition, it would be preferable to accept the Postal Service offer to prepare and submit a draft mail classification schedule, which, identifies the market dominant products it believes should be contained therein.

The Postal Service will then be allowed to categorize its market dominant services into products that best serve its business needs.

In addition, it will permit the Postal Service to fashion a draft mail classification schedule with what it believes is an appropriate level of detail.

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