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Author's profile photo Braden McCollum

PRC Rules on USPS Exigenct Rate Adjustment

The Postal Regulatory Commission finally rules on one of the USPS’s open issues dealing with the Exigency Rate Case. The PRC, in a fine example of convoluted legalese, ruled that their does need to be a tight ‘causal nexus’ between the exigent circumstances and the amount being asked for in the exigent rate adjustments. Make sense??

Basically, the PRC reaffirmed that in order to get an exigent rate increase the USPS must prove the circumstances are exceptional and demonstrate within certain guidelines what the financial impact was and how the rate adjustments will offset these losses. The PRC noted that the recent economic recession and its impact on postal volumes does actually constitute exigent circumstances, but deferred any ruling on exigent rate adjustments pending the decision on whether the USPS will try to file updates to their requests meeting the new guidelines for seeking such exigent increases. This leaves the door open for the USPS to file for Exigent Rate Increases again …

The big question now, is will they??? Will they push forward with a filing now or await the results of the next few weeks and proposed legislation and plans to move to 5-day delivery, etc?

Two key sections from the PRC filing (link provided):

“As preliminary matters, the Commission (1) reiterates its finding in Order No. 547 that the 2008-2009 recession and its impact on postal volumes constituted exigent circumstances; (2) defers ruling upon whether the Postal Service’s exigent request meets the “reasonable and equitable and necessary” tests of section 3622(d)(1)(E); and (3) defers ruling on whether new materials cited by the Postal Service and one other participant can be relied upon.” 

“The Commission concludes that “due to” should be interpreted to require a close causal nexus. In particular, the Commission interprets the causal nexus of “due to” to mean that: (1) Exigent rate adjustments are permitted only if, and to the extent that, they compensate for the net adverse financial impact of the exigent circumstances; (2) To quantify the net adverse financial impact of the exigent circumstances, the Postal Service does not have to quantify such impact with absolute precision, but must: (a) under the circumstances presented, justify its quantification through supportable methods commensurate with the amount of the proposed adjustment; and (b) demonstrate that the amount of the proposed adjustment does not exceed the net adverse financial impact of the exigent circumstances.”

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