November 30, 2020
The Postal Regulatory Commission (PRC) has created a new rate making system for the USPS. The new system ties rate setting to the decline in mail density and the statutorily mandated payments for retirement costs. Both of which, says the PRC, are out of the control of the USPS.
The Postal Accountability and Enhancement Act of 2006 (PAEA) contains a requirement for a ten year review of the way in which rate increases are determined. From that review, completed in 2020, the PRC determined that the goals of the PAEA were not being met, and therefore a change in policy was needed.
The PAEA required that postage rate increases not exceed increases in the Consumer Price Index. The PRC determined that because “the correlation between growth in USPS expenses and revenue, and the growth in CPI began to diverge” increases should now be based on new criteria. The PRC intendeds to help the USPS financial situation through the new system.
The proposal is under review by USPS management. See entire PRC Order 5763 Here