[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62712-62714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24580]


=======================================================================
-----------------------------------------------------------------------

POSTAL REGULATORY COMMISSION

[Docket No. R2013-11; Order No. 1847]


Rate Adjustment

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Commission is noticing a recent Postal Service filing 
seeking postal rate adjustments based on exigent circumstances. This 
notice informs the public of the filing, invites public comment, and 
takes other administrative steps.

DATES: Comments are due: November 6, 2013. Reply Comments are due: 
November 20, 2013.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov. Those who cannot submit comments 
electronically should contact the person identified in the FOR FURTHER 
INFORMATION CONTACT section by telephone for advice on filing 
alternatives.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
at 202-789-6820.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
II. Postal Service Filing
III. Subsequent Procedural Steps
IV. Ordering Paragraphs

I. Introduction

    On September 26, 2013, the Postal Service filed an exigent rate 
request with the Commission pursuant to 39 U.S.C. 3622(d)(1)(E) and 
subpart E of 39 CFR 3010.60 et seq.\1\ The Exigent Request seeks an 
``across the board'' increase averaging 4.3 percent for market dominant 
postal products and services, effective January 26, 2014. Exigent 
Request at 2.
---------------------------------------------------------------------------

    \1\ Renewed Exigent Request of the United States Postal Service 
in Response to Commission Order No. 1059, September 26, 2013 
(Exigent Request). See also Docket Nos. R2010-4 and R2010-4(R). 
Subpart E, captioned Rules for Rate Adjustments in Extraordinary and 
Exceptional Circumstances (Type 3 Adjustments), consists of the set 
of provisions appearing at 39 CFR 3010.60 et seq.
---------------------------------------------------------------------------

    In a related case (a Type 1-A filing), also filed September 26, 
2013, the Postal Service proposes an increase, on average, of 1.6 
percent for the same set of products and services based on the annual 
adjustment allowed under 39 U.S.C. 3622(d)(1) and 39 CFR part 3010 
subpart B.\2\
---------------------------------------------------------------------------

    \2\ Id. at 7. See Docket No. R2013-10, United States Postal 
Service Notice of Market-Dominant Price Adjustment, September 26, 
2013 (Notice).
---------------------------------------------------------------------------

    This Order provides public notice of the Exigent Request; 
establishes Docket No. R2013-11 for consideration of the Exigent 
Request; establishes an expedited procedural schedule consistent with 
the Commission's intention to issue a determination within 90 days of 
the Postal Service's filing; provides other information concerning the 
Exigent Request; and takes related administrative steps.

II. Postal Service Filing

    Background. The Exigent Request is filed pursuant to 39 U.S.C. 
3622(d)(1)(E) and the Commission's rules implementing that section, 39 
CFR Part 3010, subpart E.
    The Postal Service provides a procedural history leading to the 
filing of the Exigent Request. Exigent Request at 3-7. It indicates 
that the Exigent Request, which it characterizes ``as a complete update 
to its original request,'' is ``premised on the recent recession as an 
exigent event.'' Id. at 1, 2.
    In Order No. 1059, the Commission stated: \3\
---------------------------------------------------------------------------

    \3\ Docket No. R2010-4R, Order Addressing Motion to Supplement 
and Related Filing, December 20, 2011, at 6 (Order No. 1059).

    If the Postal Service wishes to pursue its Exigent Request, it 
must complete the submission of its entire case to the Commission. A 
complete case would include all information, materials, and 
testimony on which the Postal Service would rely to demonstrate that 
its Exigent Request satisfies the causal nexus of ``due to,'' as 
interpreted by the Commission in Order No. 864, as well as the 
---------------------------------------------------------------------------
remaining requirements of section 3622(d)(1)(E).

    The Postal Service represents that ``[t]he instant filing is 
intended to constitute an `entire case,' as contemplated by Order No. 
1059.'' Exigent Request at 7.
    Although the Postal Service captioned the Exigent Request as Docket 
No. R2010-4R, it indicates that its filing constitutes an entire case 
as contemplated by Order No. 1059. Because the filing is complete and 
to avoid any ambiguity about the record concerning the instant Request, 
the Commission establishes Docket No. R2013-11 for consideration of the 
Postal Service's Exigent Request. The Commission concludes that such an 
approach is appropriate, given the 90-day statutory deadline for its 
decision, and its need not only to manage this proceeding on an 
expedited basis, but also in harmony with its need to manage its entire 
administrative calendar and other responsibilities.\4\
---------------------------------------------------------------------------

    \4\ The documents filed by the Postal Service as part of its 
Exigent Request, will be transferred to and be included in this 
docket.
---------------------------------------------------------------------------

    Proposed rates. The Postal Service proposes price increases to 
recover approximately $1.78 billion in annual contribution. Id. at 2. 
It characterizes this as ``a modest proportion'' of the total 
contribution lost as a result of the recession. Id. at 2, 11.
    The proposed prices increase, on average, by 4.3 percent and are 
spread

[[Page 62713]]

among the classes (and all products) as uniformly as practicable, i.e., 
in an across-the-board fashion. Id. at 2, 12, 35. The Postal Service 
states that the Governors have determined that this approach represents 
``a reasonable and equitable way of recovering contribution lost due to 
the recession . . . .'' Id. at 12.
    The average increase by class and product appears in the table 
below. A full schedule of the proposed increases is provided in 
Attachment A to the Exigent Request.

            Postal Service's Proposed Exigent Price Increases
------------------------------------------------------------------------
                                                                 Percent
                      Product or service                         change
------------------------------------------------------------------------
First Class Mail:
    Single-Piece Letters & Cards..............................     4.276
  Presort Letters & Cards.....................................     4.291
  Flats.......................................................     4.627
  Parcels.....................................................     4.349
  First-Class Mail International..............................     2.393
                                                               ---------
    Total First-Class Mail....................................     4.281
Standard Mail:
  Letters.....................................................     4.259
  Flats.......................................................     4.283
  Parcels.....................................................     4.335
  High Density and Saturation Letters.........................     4.212
  High Density and Saturation Flats/Parcels...................     4.261
  Carrier Route...............................................     4.288
  EDDM--Retail................................................     4.167
                                                               ---------
    Total Standard Mail.......................................     4.264
Periodicals:
  Outside County..............................................     4.297
  Within County...............................................     4.306
                                                               ---------
    Total Periodicals.........................................     4.297
Package Services:
  Alaska Bypass...............................................     4.232
  Bound Printed Matter Flats..................................     4.626
  Bound Printed Matter Parcels................................     4.484
  Media Mail/Library Mail.....................................     4.304
  Inbound Surface Parcel Post (at UPU Prices).................     0.000
                                                               ---------
    Total Package Services....................................     4.303
Special Services:
  Total Ancillary Services....................................     4.372
  International Ancillary Services............................     4.188
  Address Management Services.................................     3.542
  Caller Service..............................................     4.329
  Credit Card Authentication..................................     5.000
  International Business Reply Mail Service...................     2.819
  Money Orders................................................     4.042
  Post Office Box Service.....................................     4.177
  Customized Postage..........................................     4.308
  Stamp Fulfillment Services..................................     5.005
                                                               ---------
    Total Special Services....................................     4.318
------------------------------------------------------------------------

Id. at 7-8 (adapted from Table 1).
    Contents. The Exigent Request includes an introduction summarizing 
the filing (Part I); a procedural history (Part II); a table of 
percentage rate changes (Part III); a discussion addressing the 
requirements of subpart E of part 3010 (Parts IV through IX); and a 
description of attachments (Part X). Id. at 9 through 45. The 
discussion in Parts IV through IX addresses extraordinary or 
exceptional circumstances (Part IV); the necessity of the requested 
contribution (Part V); honest, efficient, and economical management 
(Part VI); reasonable and equitable (Part VII); harmonization of 
exigent increases with past market dominant increases (Part VIII); and 
the timing of the Exigent Request (Part IX). Id. at 9 through 45.
    In support of its Exigent Request, the Postal Service filed 
statements by Thomas E. Thress, Stephen J. Nickerson, and Altaf 
Taufique. The Postal Service states that the Thress statement is an 
update to his statement of November 2011, and estimates the effect of 
the recession on mail volumes. Id. at 3. It states that the Nickerson 
statement calculates the amount of contribution lost due to those 
volume losses, explains why the exigent price increases are necessary, 
and describes actions the Postal Service has taken to save costs. Id. 
It states that the Taufique statement presents the proposed price 
increases and explains why they are reasonable and equitable. Id.
    The Exigent Request also includes thirteen supporting library 
references (of which ten are public and three are non-public); and two 
attachments. Id. Attachment A, captioned Changes to Mail Classification 
Schedule, is presented in legislative format and includes rate 
schedules and classification changes. Attachment B, captioned List of 
Supporting Materials, identifies three statements referred to above and 
the public and non-public library references. The library references 
include:

USPS-R2010-4R/2 First-Class Mail Worksheets
USPS-R2010-4R/3 Standard Mail Worksheets
USPS-R2010-4R/4 Periodicals Worksheets
USPS-R2010-4R/5 Package Services Worksheets
USPS-R2010-4R/6 Special Services Worksheets
USPS-R2010-4R/7 Product Cost & Contribution Estimation Model (Public 
Version)
USPS-R2010-4R/8 Cost Factor Development (Public Version)
USPS-R2010-4R/9 Revenue and Volume Forecast Materials (Public 
Version)
USPS-R2010-4R/10 Decomposition of Mail Volume Into Sources of Change
USPS-R2010-4R/11 Calculation of Contribution Lost from Recession-
Related Volume Losses
USPS-R2010-4R/NP1 Product Cost & Contribution Estimation Model (Non-
Public Version)
USPS-R2010-4R/NP2 Cost Factor Development (Non-Public Version)
USPS-R2010-4R/NP3 Revenue and Volume Forecast Materials (Non-Public 
Version)

    Confidential treatment. In Attachment B, the Postal Service 
incorporates by reference the Application of the United States Postal 
Service for Nonpublic Treatment of Materials filed as Attachment D to 
its Docket No. R2010-4 Request (July 6, 2010).

III. Subsequent Procedural Steps

    Additional information. The Commission may require the Postal 
Service to provide clarification of its request or to provide 
information to gain a better understanding of the request or the 
justification for specific rate adjustments. 39 CFR 3010.62.
    Public hearing. The Commission will hold a public hearing on the 
request. 39 CFR 3010.65(b). The Commission preliminarily allocates 
three days for public hearings (October 30, October 31, and November 1, 
2013); however, the actual number of days will depend on the nature of 
the circumstances giving rise to the request and the clarity and 
completeness of the supporting materials the Postal Service provides 
with its request. 39 CFR 3010.65(d).
    Submission of questions. Interested persons may submit to the 
Commission suggested relevant questions that might be posed during the 
public hearing.\5\ 39 CFR 3010.65(c). These questions, and any 
explanatory materials submitted to clarify the purpose of the 
questions, are to be filed in accordance with section 3001.9 no later 
than October 24, 2013, and will become part of the administrative 
record of this proceeding. 39 CFR 3010.65(c).
---------------------------------------------------------------------------

    \5\ The procedures the Commission has established in subpart E 
do not include any provision for formal intervention. Interested 
persons submitting questions for the hearing and/or comments are to 
follow the procedures discussed in this Order and codified in 39 CFR 
3001.9 (method of filing); 39 CFR 3010.65.
---------------------------------------------------------------------------

    Post-hearing participation--initial and reply comments. Following 
the conclusion of public hearings and submission of any supplementary 
materials, interested persons may submit written comments, no later 
than November 6, 2013, on: (1) The sufficiency of the justification for 
an exigent rate adjustment; (2) the adequacy of the justification for 
adjustments in the amounts requested by the Postal Service; and (3) 
whether the specific rate adjustments requested are reasonable and 
equitable. 39 CFR 3010.65(f)(1) through 3010.65(f)(3).

[[Page 62714]]

Reply comments may be filed by the Postal Service and other interested 
persons no later than November 20, 2013. 39 CFR 3010.65(g).
    Filing method. To ensure inclusion in the formal docket, all 
submissions from interested persons in this proceeding must be filed 
online as provided by rule 9 of the Commission's rules of practice, 
unless a waiver is obtained. 39 CFR 3001.9. Submissions that do not 
conform to the rules of practice for online filings and do not obtain a 
waiver from the online filing requirements will be treated as informal 
statements of views and shall be placed in a separate file to be 
maintained by the Secretary as provided in 39 CFR 3001.20b.
    Public Representative. Pursuant to 39 U.S.C. 505, the Commission 
hereby appoints James Waclawski to serve as an officer of the 
Commission (Public Representative) to represent the interests of the 
general public in this proceeding. Neither Mr. Waclawski nor any staff 
member assigned to assist him shall participate in or provide any 
advice on any Commission decision in this proceeding other than in 
their designated capacity.
    Schedule. A schedule appears as an attachment to this order. Among 
other things, three technical conferences are scheduled to provide 
interested persons an opportunity to develop a better understanding of 
the Postal Service's proposal. The first technical conference will be 
held October 9, 2013 and be devoted to consideration of the Taufique 
statement. The second technical conference will be held October 17, 
2013 and be devoted to consideration of the Thress statement. This 
conference will begin at 10:30 a.m. The third technical conference will 
be held October 18, 2013 and be devoted to consideration of the 
Nickerson statement. The Postal Service should have on hand sufficient, 
knowledgeable personnel to address interested persons' questions. 
Absent specific notice to the contrary, all technical conferences and 
hearings (other than the October 17th conference) will convene at 9:30 
a.m., eastern daylight time in the Commission's hearing room in Suite 
200, 901 New York Avenue NW., Washington, DC 20268-0001.
    Developments may warrant adoption of additional procedural dates 
and/or requirements. If so, the Commission will issue further 
procedural orders as it deems advisable or necessary to ensure timely 
completion of its review. All such rulings will be published on the 
Commission Web site: (http://www.prc.gov). The technical conferences 
and public hearings, which are scheduled for October 30, 31, and 
November 1, 2013, will be webcast.
    Posting of request; posting of other documents. The Commission has 
posted the public version of the Exigent Request on its Web site 
(http://www.prc.gov). 39 CFR 3010.65(a). The Commission encourages 
interested persons to review the Exigent Request to determine its 
impact on their concerns.
    Access to nonpublic material. Information on the Commission 
practices with respect to material filed under seal, including how to 
obtain access to such material, appears in 39 CFR part 3007.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. R2013-11 to consider 
matters raised in the Postal Service's September 26, 2013 Exigent 
Request.
    2. The Commission adopts the procedural schedule in the Attachment 
to this order, subject to further developments.
    3. The Commission will sit en banc in this proceeding.
    4. Comments by interested persons are due no later than November 6, 
2013.
    5. Reply comments may be filed by the Postal Service and other 
interested persons are due no later than November 20, 2013.
    6. Pursuant to 39 U.S.C. 505, the Commission appoints James 
Waclawski to represent the interests of the general public in this 
proceeding.
    7. The Secretary shall arrange for publication of this order in the 
Federal Register.

                Attachment--Docket No. R2013-11 Schedule
                         All dates refer to 2013
------------------------------------------------------------------------
               Date                                Action
------------------------------------------------------------------------
Thursday, September 26............  Filing of Exigent Request.
Wednesday, October 9..............  First Technical Conference Taufique.
Tuesday, October 17 (starting at    Second Technical Conference* Thress.
 10:30 a.m.).
Friday, October 18................  Third Technical Conference*
                                     Nickerson.
Thursday, October 24..............  Deadline for filing suggested
                                     questions to be asked of the Postal
                                     Service during the public hearing
                                     (39 CFR 3010.65(c)).
Wednesday-Friday Oct. 30, Oct. 31,  Public Hearings* (39 CFR
 Nov. 1.                             3010.65(b)).
Wednesday, November 6.............  Deadline for filing initial comments
                                     (39 CFR 3010.65(f)).
Wednesday, November 20............  Deadline for filing reply comments
                                     (39 CFR 3010.65(g)).
Wednesday, December 25............  90th day following filing of the
                                     Exigent Request.
------------------------------------------------------------------------


    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2013-24580 Filed 10-21-13; 8:45 am]
BILLING CODE 7710-FW-P