PRC Denies USPS’ Exigent Rate Case Proposal
On September 30 the Postal Regulatory Commission denied the United States Postal Service’s exigent rate case filing. Per Ruth Y. Goldway, Chairman of the PRC:
“The Commission finds that the Postal Service has shown the recent recession to be an exigent circumstance but it has failed both to quantify the impact of the recession on its finances and to show how its rate request relates to the resulting loss of mail volume; therefore, we unanimously deny its exigent rate request,”
The PRC noted that in 2009 the USPS created and fulfilled cost-reduction measures to save over $6 billion. Per the PRC “these results indicate that the Price Cap is working and providing the right signals for the Postal Service to reduce costs and improve efficiency.” They also mention that although the $6 billion in cost reductions were less than the resulting revenue loss of the volume decline in 2009, the USPS cost reduction plans are “producing results and work hours have declined faster than volumes in 2010.”
Postmaster General Jack Potter released a statement shortly after the ruling citing his disappointment in the ruling but applauding the PRC for acknowledging the large-scale financial risk brought on by the drop in mail volume and the mandated prefunding of Retiree Health Benefits. The USPS will now turn its attention to even more cost-reduction strategies, new product offerings, and legislation to address its mandated financial obligations.
