PRC verifies USPS rate increases

The Postal Regulatory Commission has completed its first review of the US Postal Service’s price adjustments under the Postal Accountability and Enhancement Act, finding that all rate increases announced February 11 and set to go into effect May 12 are within the required Consumer Price Index cap.

The commission also ruled that there was “adequate justification” for 13 out of 14 workshare discounts, that exceed 100% of the costs avoided. The exception is a 1.4-cent discount for using a barcode on mixed automation area distribution center Standard Mail letters.

The USPS must file an amended rule based on this report. According to Dave Partenheimer, a USPS spokesman, the USPS’ management is currently reviewing the PRC’s response.

“We appreciate the timeliness of the PRC’s review,” he said. “The new pricing process is much more streamlined than the old rate case system, and, in keeping with that streamlined process, we will be responding quickly to the PRC’s review. As the PRC noted, this inaugural use of the new rules has worked well, and the Postal Service can make a small adjustment that would take care of the issue in question and would have only a small effect on prices.”

The PRC’s findings conclude a 20-day public comment period and a 14-day review period, which verified the price adjustments scheduled to become effective May 12, 2008.

The commission commended the USPS for its efforts in what it called the “inaugural market dominant price adjustment proceeding.”

“Although the Commission identifies areas where additional analysis will facilitate future proceedings, it commends the Postal Service for promptly and diligently providing needed clarifications and supplementary explanations,” the report said.

Under the PAEA and the PRC’s regulations, the USPS may “bank” the difference between the cap and its planned price changes for use within five years. There is a small bankable margin in each rate category; the largest disparity is in periodicals, which has a bankable increase of 0.176%.

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