PRC Adopts Final Rules to Modify the Rate System for Classes of Market Dominant Products

The Postal Regulatory Commission (Commission) issued Order No. 5763 adopting rules to modify the system for regulating rates and classes for Market Dominant products. The Postal Accountability and Enhancement Act of 2006 (PAEA) required the Commission to review the existing Market Dominant rate and classification system 10 years after the enactment of the PAEA to determine if the system achieved the PAEA’s nine objectives, considering the 14 factors established by Congress. The objectives reflect the goals of the PAEA to create a flexible, stable, predictable, and streamlined ratemaking system that ensures the Postal Service’s financial health and maintains high-quality service standards and performance. As adopted, these rules are necessary to enable the Market Dominant ratemaking system to achieve the statutory objectives set forth in 39 U.S.C. 3622(b).

In Order No. 4257, which examined the current ratemaking system, the Commission identified three principal areas of the PAEA system that encapsulate the nine objectives:
(1) the structure of the ratemaking system; (2) the financial health of the Postal Service; and (3) service. The Commission concluded that the system had achieved some of the goals of these areas, but the overall system had not achieved the objectives taking into account the factors of the PAEA.

In brief, the Commission’s findings were as follows:
*The system was largely successful in achieving the goals related to the structure of the ratemaking system. However, the Commission concluded that the ratemaking system had not increased pricing efficiency.
*The system had not maintained the financial health of the Postal Service as intended by the PAEA. While the Postal Service had generally achieved short-term financial stability, both medium-term and long-term financial stability measures had not been achieved.
*High-quality service standards had not been maintained during the 10 years following the enactment of the PAEA.

Issuance of the final rules has been the Commission’s top priority. Throughout the process to modify the ratemaking system, the Commission has operated under the guiding principles of openness and integrity, and has worked to develop consensus on significant technical complexities and to carefully consider numerous comments that reflected widely divergent views on all aspects of the modifications to the ratemaking system.
much more at source: https://www.prc.gov/press-releases/prc-adopts-final-rules-modify-rate-system-classes-market-dominant-products/5013

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