Today, the Postal Regulatory Commission (PRC) initiated its long-awaited review of the postal rate system for regulating rates and classes of mail. This review was ordered by the Postal Accountability and Enhancement Act, enacted in 2006, establishing the rate cap system we have experienced over the last ten years. Pursuant to that legislation, the PRC is required to review the current system to determine whether the current system is achieving the objectives established by Congress. If the PRC finds that the objectives, taking into account various factors, are not being met, it has the authority to either propose rules that modify the system or adopt an alternative system to achieve the objectives.
Kicking off this review process today, the PRC released an order outlining the objectives and timing for the review. Key elements up for review include, but are not limited to, the following:
- The annual limitation on the percentage changes in rates
- The schedule for rate changes
- The 45-day notice before the implementation of rate adjustments
- Expedited rate changes due to extraordinary or exceptional circumstances
- Class level application of the annual limitation
- The rounding of rates and fees
- The use of unused rate authority
- Worksharing discounts
For Connectiv members, this review process has been looming as a potential opportunity for the PRC to acquiesce to the wishes of the U.S. Postal Service to provide for an across the board rate increase similar to the exigent increase adopted temporarily in 2013, or possibly a focus on “underwater” products such as periodicals. Ultimately, the PRC has the authority to propose a new rate system where rates are subject to greater annual increases, exceeding the current cap on consumer price index (CPI) increases that have been modest each year over the last ten years.
The PRC is taking public input now, at the outset of this process, with comments due by March 20, 2017. SIIA is reviewing this order and will be providing additional detail and seeking member input in the near future for producing comments on behalf of the Association. It is likely that the review process will consume much of 2017, with the possibility of closure and changes after the mid-point or around the third quarter of 2017.