Saturday, March 20, 2010

Understanding the Postal Regulatory Commission's Power.

In a number of previous posts, I indicated that the Annual Compliance Review had the potential to become a mini-rate case.  In her remarks before the Financial Services and General Government Subcommittee of the Senate Appropriations Committee, Postal Regulatory Commission Chairman Ruth Goldway laid out a view of the Postal Regulatory Commission that more than reinforces that view.

Chairman Goldway, in response to a question from Senator Durbin, noted that the PRC's opinion on the Postal Service's 5-day delivery proposal was advisory.  The PRC could not stop the Postal Service from implementing a service change that it advised against.   However she indicated that the Commission had the power to compel the Postal Service to reinstate service if it finds as part of the annual compliance review that the change results in the Postal Service no longer providing the universal service required by the law.

Her exact quote was:

Every year we have to make a report on whether the Postal Service has complied with the law and that means whether it [the Postal Service] has met its obligation to provide an efficient and fair level of universal service.  So if they don't take our advice on this [the 5-day delivery proposal] and at the end of the year they entered into an activity that we deem is less than universal service, we can find them out of compliance and require them to start up some new activity again.   But we could not tell them at the time of our advisory opinion what to do.

The PRC will issue its review of the Postal Service's 2009 Annual Compliance Report in the next few weeks.   This quote suggests that the Commission will assert that it has the power to compel the Postal Service to change any aspect of its rates or service in order to comply with the law. 

The Public Representative and others presented testimony in the annual compliance proceeding stating that Postal Service rates put it out of compliance with the law.   Given Chairman Goldway's understanding of the Commission's powers, the possibility exists that the Commission could concur with these assessments and require the Postal Service to adjust its rates upward to comply with the law.  

Mailers and the Postal Service appear likely to find an outcome in the PRC's review of the Annual Compliance Report to their liking only if the Commission does not find that the testimony arguing non-compliance was convincing or identifies a way to defer its power to compel Postal Service action.

Earlier Posts on this topic:


Postmarc said...

Before the Postal Service starts implementing service changes, the issue of the $75 BILLION DOLLAR overpayment for Civil Service retirees needs to be addressed by Congress.

The OIG and The Hay Group study caught this glaring error in January 2010. Why hasn't there been an outcry to correct this? $75 Billion Dollars would dramatically change the financial standing of the USPS.

Or is there another agenda at work here? Maybe because this is a contract-negotiation year someone wants to make the USPS look as financially bereft as possible. But that would be cynical, wouldn't it?

I am just looking for a simple answer to a simple question: Where is our $75 Billion, Congress?

ibrahim abdullah said...

USPS employees need to get ready for 5-day delivery. The only way for the USPS to remain as it is would take drastic upgrades in the way day-to-day operations are being(mis)managed and thats not going to happen.

Anonymous said...

If the PRC is obligated to ensure "[the Postal Service] has met its obligation to provide an efficient and fair level of universal service", how will network realignment be affected if they determine that the closure of dozens of mail processing facilities has negatively affected "efficient and fair" service? If one day mail has now become 3 to 5 day mail in certain areas of the nation (because of over-zealousness in consolidating processing activities), would this be considered unfair? Would the PRC order the USPS to re-open shuttered plants? I guess my point is that, while the PRC is concerned about the possible disparities in service due to 5 day delivery, they don't seem to be too concerned about the thousands of mailers who are already being unfairly impacted by AMP "studies" that were put-up jobs to slash operating costs by any means necessary. This is happening right now!