PRC Slams USPS for Using Old Data in Rate Case
Riding on the heels of industry outrage over the USPS’ use of old financial data to support the proposed rate hike, the Postal Rate Commission took the Postal Service to task on Tuesday.
The USPS used 1998 financial data, instead of 1999 data, to support the proposed January 2001 increase averaging 6.4%.
In a carefully worded “Notice of Inquiry,” the PRC told the USPS to justify its use of the two-year-old financial data. It requested an answer by Feb. 14–two days before the commission meets with postal officials and participants about the hike.
The 1998 data is used “even though Fiscal Year 1999 ended four months before” filing the rate case, the PRC said.
The commission 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.”
It 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%.
In using the two-year-old data, the USPS has failed to take into account the actual effects of last year’s rate increase, the PRC said.
On Jan. 10 of last year the USPS raised its rates by an average 3% to help raise its fiscal 1999 gross revenues to $62.7 billion. This move resulted in a $353 million surplus. A year earlier, the USPS grossed $60.1 billion and posted a $550 million surplus.
