PRC releases final ratemaking regulations

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The Postal Regulatory Commission (PRC) has released its final ratemaking regulations nearly eight months ahead of the deadline set by the Postal Accountability and Enhancement Act passed in December 2006.

These rules relate to rate adjustments for market dominant products of the US Postal Service, competitive products and the establishment of a Mail Classification Schedule, which categorizes products as either market dominant or competitive.

One of the biggest impacts the new rules will have on postal legislation is the Consumer Price Index cap it places on future rate increases. Next spring is the last time that the USPS can file a rate increase under the old law with no price cap; however, many are hoping to avoid such an increase, including PRC chairman Dan G. Blair.

"[The PRC and the USPS] have a full agenda before us as we implement the requirements of the PAEA," Blair said in a statement. "Having the new ratemaking system in place sooner, rather than later, allows us to focus on the tasks ahead and hopefully avoid an old cost-of-service rate case."

Blair also praised the public input on the rulemaking process. The PRC issued two Advance Notices of Rulemaking, held three field hearings, and invited comments and reply comments on the proposed regulations.

Changes made to proposed rules, issued on August 15, came as a result of reply comments and included reaffirming the use of the rate cap for market dominant products; adopting a transition rule for the calculation of rate cap in the event of a transitional rate filing; reaffirming that each negotiated service agreement (NSA) is a separate product, but that functionally equivalent NSAs may, with supporting evidence, be grouped as one product; and adopting initial lists of market dominant and competitive products.

The full regulations order can be accessed at www.prc.gov.

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