THE 10-YEAR REVIEW OF THE USPS RATE SYSTEM IS UPON US A look at the PRC’s upcoming review of the PAEA and what the potential, far-reaching impacts could be.
By Kathleen J. Siviter
ate 2016 marked the tenth year since the current set of laws governing the U.S. Postal Service were enacted. The Postal Accountability and Enhancement Act (PAEA) was passed into law in December 2006, and it included the requirement that 10 years later, the Postal Regulatory Commission (PRC) would perform a review to determine if the new rate-making system that was put in place in 2006 is meeting the objectives of the law. And so the process began, with the PRC opening a “docket” (RM2017-3) on December 20, 2016, to begin the required review. The PRC initially laid out how it wanted those commenting on the review to frame their comments, as well as a rough time-
MAY-JUNE 2017 | MailingSystemsTechnology.com
table for the proceeding. It then began a period for public comment, which ended on March 20, 2017. Over 65 separate sets of comments were filed at the PRC in the proceeding, including comments from the U.S. Postal Service, USPS employee labor organizations, UPS, associations representing mailers and service providers, dozens of individual businesses and non-profit organizations, and others. Why so much interest in this particular regulatory proceeding? There is a lot at stake… What’s at Stake? Obviously one of the biggest things at stake in this proceeding is whether USPS rate increases for market dominant (monop-
oly) products will continue to be capped at the annual CPI. But there are many other elements in the law that the PRC is likely to review and which could be impacted by the outcome of the proceeding(s). The current law has nine objectives that the rate system should achieve, including maximizing incentives to reduce costs and increase efficiency; creating predictability and stability in rates; maintaining high-quality service standards; allowing the USPS pricing flexibility; ensuring the USPS has adequate revenues (including retained earnings) to maintain financial stability; reducing the administrative burden and increasing the transparency of the ratemaking process; enhancing mail security and deterring terrorism; establishing and maintaining a just