PRC Leaves Exigency’s Removal in Place For Now

The Postal Regulatory Commission issued an order denying the Postal Service’s request that remand the planned removal of the exigent rate surcharge in August. The order, at the same time, removed the requirement that USPS gives mailers 45-day notice of the change in rates.

That latter item gives PRC time to react to changes in the assessment of exigency’s ultimate price, which was requested by the D.C. Circuit Court of Appeals in a decision handed down June 5. In its original approval of the exigent rate, PRC put a price of around $2.8 billion on the cost of the Great Recession to the Postal Service. In the request filed last week, USPS fixed the price closer to $4 billion.

The court had denied the Postal Service’s request to extend the surcharge indefinitely, but found fault with the PRC’s “count once” method of determining volume lost to the Postal Service by the recession. The court remanded the case back to PRC for review. USPS, in kind, asked for a remand of August’s planned removal of exigency, arguing that it would not be able to comply with the 45-day notice mandate, and that starting and stopping the process would end up further damaging the Postal Service and the public at large.

The new notice from the postal commissioners indicated their intention to quickly deal with the court’s request. Lifting the 45-day requirement gives them the breathing room to do so. “If the Postal Service were to file the 45-day notice of intent to remove the surcharge by mid-June, this notice could trigger a burdensome series of rate decreases and increases as described in the Postal Service’s motion,” read the PRC’s latest order, dated June 12. “The Commission agrees that it is desirable to avoid such a circumstance.”

The PRC made clear that it was not convinced of the authenticity of the Postal Service’s $4 billion assessment for exigency. It also noted that, in any event, the appeals court had yet to issue its ultimate mandate and won’t until at least the end of July, following customary procedure.

“Pending issuance of the mandate, the Commission is not prevented from considering the impact of the court’s opinion on collection of the exigent surcharge,” read the PRC notice. “The Commission is establishing procedures that will permit it to act once the court’s mandate is issued. In the meantime, the Postal Service continues to be authorized to collect the exigent surcharge.”

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