PRC Order on Exigent Surcharge Removal

The PRC has issued an Order addressing what the Postal Service must do if the Court of Appeals upholds the December 24, 2013 decision for the 4.3% exigency to be temporary.

A copy of the PRC Order is available on this link:

R2013-11 Order No. 2319-Order on Exigent Surcharge Removal

Highlights of the Order are as follows:

  • To help mailers plan, the Postal Service is ordered to provide bi-weekly estimates of the incremental and cumulative surcharge revenue it has received starting with the quarter in which the Postal Service anticipates removing the surcharge. In other words, if the Postal Service thinks it will have recouped the 2.8 billion dollars the PRC found it was entitled to receive in after rates contribution by September 2015, it will need to start doing reports on where it stands with revenue recouped every two weeks in the third quarter.
  • The Postal Service shall file with the PRC a notice of the removal of the exigent surcharge at least 45 days before the date of the removal.
  • The Postal Service is free to, but not required to, simultaneously file its cumulative CPI increase at the same time that it files the notice of the removal of the exigent surcharge so that the implementation date of the CPI rate adjustment, and the removal, are the same. However, the PRC ordered the USPS to separately file for and address compliance with the rate cap requirement, and the requirements relating to work-share discounts, in its CPI rate filing. Any CPI adjustment must be calculated on the base rate.
  • If the Postal Service elects to remove the surcharge without an accompanying inflation based adjustment, it is not required to demonstrate that the resulting rates are in compliance with the price cap or work-sharing discounts. It could simply do an across the board 4.3% rollback.
  • The PRC agreed that the Postal Service would be able to take into account (and deduct an amount from cumulative revenues) for Forever stamps bought before the exigency increase but used during the period that the exigency increase has been applied, to account for the use of Forever stamps that were bought at a lower price. The adjustment the Commission will permit represents approximately 1% of the 2.3 billion cap on the allowed surcharge.

Although no official announcement has been made, the discussions that took place before the end of the year, and the Postal Service’s postponement of its normal fall filing of the CPI rate adjustment, and filing for any incentives, suggests that the USPS is contemplating a rate adjustment that would occur at approximately the same time period. Keep in mind, that this assumes that the Court of Appeals upholds all or some limit on the 4.3% increase as a permanent price change. We are still waiting for the results of that decision.

  • Recent Posts

  • Categories

  • Archives

  • Join the MFSA, Alliance, or DMA.