Action Needed: Deadline Approaching for Ratepayer Input

Last May, the Postal Regulatory Commission issued a press release about a task it was assigned by Congress.

“As adopted by the Joint Explanatory Statement accompanying the Consolidated Appropriations Act, 2022, the House of Representatives Report 117-79 states:

‘Rate Increases for Market-Dominant Products.—The Postal Accountability and Enhancement Act of 2006 (PAEA) required the PRC to review the existing Market Dominant rate and classification system 10 years after the enactment of the PAEA.  Based on this review, the PRC adopted rules in November 2020 providing greater pricing flexibility to the United States Postal Service (USPS).  USPS has used this expanded authority to propose increasing certain postal rates effective August 20, 2021, by approximately 7 percent.  The Committee is concerned with the size and timing of the rate increase and that the PAEA process did not account for the impact of the pandemic, including factors such as higher package revenues and emergency funding provided to the USPS.  The PRC is directed to study these factors and report to the Committee within 270 days on how these factors should impact the rate increases proposed by the USPS and the PRC rules adopted in November.’  H. Rep. No. 117-79 at 100 (Jul. 1, 2021).

“The accompanying Joint Explanatory Statement added that, ‘In preparing the report on market dominant products included in House Report 117-79, the PRC is expected to consult with stakeholders.’  Joint Explanatory Statement, Division E—Financial Services and General Government Appropriations Act, 2022, at 49, 162 Cong. Rec. H1709, H2356 (daily ed. Mar. 9, 2022).

“In response, the Commission offers the opportunity for interested persons to provide input on the issues identified by the Report language above via email to [email protected] or by letter to the Commission at:
901 New York Ave., N.W.
Ste. 200
Washington, DC 20268 by July 31, 2022.

Because the release got limited circulation, and because there was no docket opened or Federal Register notice published, the invitation likely has gone largely unnoticed – generating fewer than possible responses.

The issue

The matter on which the commission is asking stakeholders to comment is simple: should the PRC revisit the final rule it issued on November 30, 2020, that established three new forms of rate authority for the USPS (density, prefunding, and non-compensatory) in light of the changed circumstances over the intervening period?

Since late 2020, the pandemic’s impact on mail volume has been manifest, the Postmaster General has embarked on a campaign of frequent rate increases designed to extract all available revenue from ratepayers, and – perhaps most importantly – the Postal Reform Act of 2022 has been enacted.  That law eliminated the “prefunding” requirement that overwhelmed USPS finances since 2006, and waived any past payments still unpaid, resulting in an immediate positive charge to the Postal Service’s books and the reduction of the agency’s overall obligations by as much as $107 billion.

These factors – and the pricing authority of the soaring CPI itself – weaken the need for the additional pricing authority that the PRC found appropriate in 2020.  Times have changed, as have postal economics, so it would seem similarly appropriate to revisit the reasons for the 2020 final rule and acknowledge that they no longer compel the same response.

Though the PMG would be expected to oppose any reduction in his pricing authority, commercial mailers and all ratepayers should – in their own interest, and to preserve mail volume – voice their support for amending the 2020 final rule. 

The PRC wants to hear from stakeholders, and none have more at stake than commercial mail producers and their ratepaying clients. Submit your input for the PRC to [email protected] BEFORE JULY 31, 2022.

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