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April 18, 2007—Will the US Postal Service (USPS) file one last postal rate case at the Postal Regulatory Commission (PRC) before the new postal reform law takes full effect in 2008? After all, the new postal law will trigger new rate-setting rules at the PRC, and will limit — albeit with some wiggle room — the USPS’s future rate increases for market-dominant products to the Consumer Price Index (CPI).
That was one of the key questions asked yesterday by members of the US House of Representatives Committee on Oversight and Government Reform’s Subcommittee on Federal Workforce, Postal Service, and the District of Columbia. The panel, which is chaired by Rep. Danny K. Davis (D-IL), conducted the first postal oversight hearing since Congress passed — and the president signed — the postal reform act last December.
And what was the answer to that big question about a postal rate case filing later this year? Maybe yes; maybe no.
When asked, Postmaster General John E. Potter told the House panel that he was “operating in the blind” and needed to keep his options open.
Potter warned the subcommittee that “success under the new law will not be easy,” in part because the Postal Service will be forced to hold some rate increases to inflation and become more rigorous about controlling costs.
PRC Chairman Dan G. Blair told the panel that, as part of the overhaul, the Postal Accountability and Enhancement Act (PAEA) creates a regulator to write rules on how to establish mail rates and to hear complaints about mail service.
While the law permits the USPS to raise rates one more time, by December, under the old law, Blair said, “There is no question that an additional rate case would divert Postal Service and Commission resources that, in my view, would be better devoted to developing the new system of regulatory oversight. Nevertheless, the Commission is committed to timely performance of all its statutory obligations, and to doing so in a reasoned and balanced manner.”
Blair said the PRC “is now fully engaged in implementing the strengthened regulatory functions assigned by the PAEA.” This effort, he continued, involves completing pending business under previous law, as well as developing an organization adapted to the Commission’s new responsibilities.”
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