February 4, 2015

Inexplicably, the U.S. Court of Appeals for the D.C. Circuit has taken much longer than anyone expected to issue a decision in the appeal of the PRC’s exigent rate case decision. The D.C. Circuit normally issues its decisions on Tuesday and Friday mornings before 11 AM, so we keep watching and waiting.

Mailers are currently paying a 4.3% surcharge in all of their rates and the USPS is enjoying surplus profits as a result. The order by the PRC caps the excess revenue at $3.4 billion which the USPS is expected to reach by late summer or early fall this year. Then all postage rates would be required to decline by 4.3%, unless the court overrules the regulator’s order. Before the court the Alliance argued that the $3.4 billion was plenty to compensate the USPS for the temporary effects of the recession, while the USPS sought an order making the surcharge permanent. We calculate a net present cost to mailers of $60 billion if the surcharge is made permanent.

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