PRC: Rate Case Is Coming

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ORLANDO, FL -- In what is turning into a he said/she said debate, the Postal Rate Commission is now saying that a rate case will be filed this summer, despite the U.S. Postal Service's claims to the contrary.


Speaking at his last National Postal Forum as postmaster general, William J. Henderson said Monday that although the USPS is going through tough times, a new rate increase is not a given. He also said that he has asked Deputy Postmaster General John Nolan "to explore alternatives to filing a double-digit rate hike this year."


However, George Omas, vice chairman and acting chairman at the PRC, speaking at a breakfast meeting yesterday sponsored by the Alliance of Nonprofit Mailers, said, "Despite what you folks heard yesterday, there will be a rate case this year, and it will be a $6 billion to $8 billion case.


"The case will probably call for rate increases [of] about 10 to 15 percent," he added.


The USPS announced earlier this year that it might file for a rate increase averaging 10 percent to 15 percent this summer.


Omas said he could not speak about the R2000-01 rate case because it is still being negotiated.


The USPS Board of Governors earlier this month sent the recommended R2000-01 rate increases implemented in January back to the PRC. The governors want to overturn the PRC's recommendation to cut the postal service's rate request from a 6 percent average increase to a 4.6 percent increase. The USPS claimed that the PRC exceeded its authority when it reduced the amount of new revenue designated for the USPS' contingency fund from $1.7 billion to $1 billion.


The PRC asked interested parties to submit their comments on the governors' decision by March 19. The reply briefs from interested parties commenting on those submissions were due on March 26 to the PRC.


If the PRC again refuses to approve the 6 percent rate increase, the governors have the power to raise rates unilaterally by a unanimous vote. Insiders said it seems likely that they will do so and that mailers may see an increase in rates in the next 30 to 60 days.


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