PRC Scores USPS: Tells postal service to provide updated rate case data

Riding on the heels of industry outrage over the U.S. Postal Service’s use of old financial data to support the proposed rate hike, the Postal Rate Commission early in February asked the USPS to justify its actions.

In response, the postal service sidestepped the issue of why it used 1998 financial information instead of 1999 data to support its request for a January 2001 rate hike averaging 6.4%. The USPS replied that it would provide the PRC with unaudited 1999 financial data sometime late this month and an audited report by mid-April. The USPS fiscal 1999 year ended last September.

In its carefully worded “Notice of Inquiry,” the PRC noted that the USPS is required by its rules to use “as a base year for its [needed revenue] projections the total actual accrued costs during the most recent financial year for which they are available.”

The PRC implied that it wanted to avoid a repeat of the 1997 rate case in which the USPS used 1995 fiscal data to support a then-proposed 4.5% rate hike, which was later trimmed to 3%. That case was also widely criticized by direct marketers, mailers and the PRC for the USPS’ reliance on outdated financial data.

In its reply, the USPS added that the responsibility for preparing the reports rests with the same individuals who are scheduled to testify at the rate case hearings expected to begin in April. The whole process would be hastened if these individuals were to be excused from all other aspects of their jobs, it continued.

Postal lawyers cautioned that the audited report could be delayed slightly because “the process is dependent upon the number and magnitude of the unforeseen issues that arise.”