USPS Fires Back

October 22, 2010       Kate Rogers      

Nonprofit mailers who breathed a sigh of relief at the Postal Regulatory Commission’s (PRC) denial of the United States Postal Service’s (USPS) exigent price request last month should know, the USPS isn’t going down without a fight. Today the USPS announced its decision to appeal the ruling, claiming the PRC misread the statute and applied an “incorrect standard in evaluating the request” for the price increase.

The PRC’s rejection of the proposed average 5.6-percent hike was the first time it had ruled on an exigent rate case under the Postal Accountability and Enhancement Act of 2006 (PAEA).The Postal Service ended its third quarter in June with a net loss of $3.5 billion, compared with $2.4 billion during the same quarter of 2009. It also reduced costs by more than $6 billion last year.

The exigent price request would have generated approximately $2.3 billion in revenue for 2011, according to the USPS. Filing for the price change was the only way the Postal Service could backpedal out of its dire financial straits. According to its release the USPS’ “long-term financial viability… will remain questionable unless the March 2 action plan is fulfilled.”

“We have a fundamental disagreement with the PRC’s interpretation of the law,” said Postmaster General John E. Potter, in a statement. “This action is an investment in our future. We need to understand and define the rules under the current law should the Postal Service find itself in a similar situation in the future.”