How You Can Help Avert Another Rate Hike Disaster
And how does the Postal Service intend to raise this new booty? Two options:
1. File one more old-style, cost-of-service rate case, which the new postal law permits provided the request is filed before Dec. 20, 2007.
2. Request a rate change under the class-based inflation cap provided by the new postal law.
There’s no doubt in the mind of any rational postal representative that mailers should strive to avoid, at all costs, having the Postal Service request a billion dollars in new rates under the old cost-of-service, rate-making rules. Recent history should have provided more than sufficient proof of the perils associated with giving the PRC another crack at second-guessing the USPS’ business judgment (even if that judgment was somewhat short-sighted). If a revenue increase is really needed, then the Postal Service and the PRC should be urged to effect any rate change under provisions envisioned by the new postal law.
Discretion on Rate Categories
The PAEA inflation-based pricing limit pertains to revenues derived from mail aggregated at the class level. Under PAEA, the Postal Service will have considerable discretion as to how rate increases are to be applied at the rate category and subclass levels. So what, in fact, is an inflation cap on rates calculated on the class as a whole may actually be reflected in rates that might be above or below cumulative inflation when viewed from a rate category or subclass perspective.