USPS Seeks Regulatory Changes That Would Boost Postage Rates

WASHINGTON, DC — In announcing its fiscal first quarter results, the USPS said it is “in pursuit of further administrative and legislative reforms to remedy outdated and unwarranted financial and regulatory burdens that negatively impact our liquidity as we continue to strive to serve our customers in a fiscally responsible manner.

“These reforms include: changes in retiree pension benefit funding rules for the Civil Service Retirement System (CSRS) benefits, diversification of pension asset investments, raising the statutory debt ceiling, and workers’ compensation administration reform.

“The Postal Service also recently petitioned the Postal Regulatory Commission (PRC) for certain regulatory changes, including: modification of the Market Dominant ratemaking system through the elimination of the price cap and adoption of a regulatory monitoring ratemaking system in order to achieve the objectives of forging a sustainable path; alternatively, if the price cap is maintained, re-baselining the rates to ensure they are compensable while also maintaining adjustment factors to ensure that the system is flexible enough to deal with external circumstances that may arise; and repeal of the minimum remittance payment associated with retiree pension benefit amortization payments required by our regulator with regard to our retirement-based rate authority.”

Overall, the USPS continues to urge the PRC to undertake a holistic review of its rate setting systems and make postal financial sustainability a priority moving forward, as required by law.

“The financial results for the quarter continue to reflect the realities of our mandated cost structure and the ongoing decline in volume. We were able to offset these constraints to some degree by aggressively managing the costs under our control, including a 9 million work hour decrease during a successful peak season, which kept our largest expense component relatively flat,” said Chief Financial Officer Luke Grossmann. “But for our strategy to truly succeed, further reforms and regulatory changes will be required on top of organizational efforts to find additional operational efficiencies and to develop revenue strategies and innovative products and offerings that generate growth.”

PMG’s Remarks

At the Board of Governor’s meeting, U.S. Postmaster General David Steiner said, “And the Postal Regulatory Commission must recognize our dire financial situation and not limit our ability to adjust rates to reflect the cost of our universal service mandate. Instead, we need a pricing system that is modern and flexible, and the PRC needs to expeditiously consider our proposals to correct the deficiencies in the current system.”

PMG Steiner continued: “As eloquently referenced by Commissioner Ann Fisher in her dissent to the recent order, I don’t believe the PRC’s actions reflect or recognize the current realities, and I would urge them to provide more weight to the current financial position of the USPS in their future deliberations. These are not abstract policy debates. They directly impact our ability to invest, to modernize, to compete … and to protect the universal service we provide to the American public.”