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PRC Ratesetting Plan Will Likely Be Revamped, Postcom CEO Says

Plunkett MCOM 18

The Postal Regulatory Commission will likely revamp its proposed ratesetting plan when it decides on final approval this summer/fall, Postcom CEO Michael Plunkett said at MAILCOM ’18 on April 10.

And if the PRC does not modify its plan? Mail industry groups will likely go to court to stop it, according to Plunkett.

The PRC’s plan gives the USPS 2% above the inflation cap each year for the next five years. It also gives the USPS the opportunity for another 1% if it meets certain service standards. And the plan standardizes worksharing discounts that could add another 2%.

Mailers assert the PRC can not change the CPI cap established in PAEA, the postal reform law passed in 2006. This would be the basis of legal action to prevent implementation of the rate hikes.

Plunkett cited the practical impact of raising rates would be devastating to mailers and would mean some periodicals would cease print publication. He also said the plan announced in December revealed disagreement among PRC commissioners over the right course of action.

“This is the only time in my memory when every single PRC commissioner wrote supplemental comments,” Plunkett said. ‘This indicates there is division in the Commission.”

And if the PRC does look to revamp its original proposal, Plunkett believes they could face legal challenges from the Postal Service.

“Litigation and lengthy administrative proceedings are poorly suited to resolve complex issues of this kind,” Plunkett said.

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