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PRC Returned Proposed Rate Adjustments

rate-adjustment

The Postal Regulatory Commission (PRC) returned proposed rate adjustments for Standard Mail, Periodicals, and Package Services classes to the Postal Service to allow for modifications that comply with the applicable legal requirements. The rate increases are proposed to be implemented April 26, 2015.

The Postal Accountability and Enhancement Act of 2006 provides for ratemaking flexibility and allows the Postal Service to adjust rates for Market Dominant products as long as the increase for each class of mail meets certain statutory and regulatory requirements, the most prominent of which is that such increases are kept under the rate of inflation, as determined by the Consumer Price Index.

A PRC review of the Postal Service’s proposal to adjust rates for Standard Mail, Periodical, and Package Services found that:

  • In Standard Mail, certain unequal commercial and nonprofit discounts, certain work share discounts, and the Postal Service’s methodology for calculating certain billing determinates do not comply with applicable legal requirements.
  • The PRC was unable to make statutory required finding to determine price cap compliance for Page Services products due to incorrect adjustable billing determinants and incorrect price cap calculations.

In recent years, Stand Mail flats and Periodicals have not covered their cost despite increased investment in processing automation.

The PRC’s complete analysis of the Postal Service’s price adjustments for these categories of mail can be found in Order No. 2378, under Docket No. R2015-4.