Q&A: PRC Chairman Goldway on Exigent Rate Case Ruling

After the Postal Regulatory Commission unanimously rejected the U.S. Postal Service’s request for an exigent rate case hike on Sept. 30, PRC chairman Ruth Y. Goldway said her panel was aware that it would be “unprecedented and whatever decision we make will be controversial.”

This marked the first request for an exigent rate increase the PRC has considered. decision was rendered, and it took nearly three months of deliberations. Multichannel Merchant Senior Writer Jim Tierney caught up with Chairman Goldway to discuss the ramifications of the decision.

Q: Given the historic nature of the PRC’s decision to reject the exigent rate case proposal from the USPS, what impact do you see this decision having, both short- and long-term?

A: In the short term, mailers will be able to operate their businesses at the same postage rates. In testimony during the exigency rate case, mailers advised that they would continue to mail at the same or increased levels if rates were not raised, but that a rate increase would lead to less mailing activity.

For the Postal Service [executives], this means their financial management is crucial. As they testified, even with the rate increase, which they had intended to implement next January, they would still face a liquidity crisis at the end of the fiscal year 2011 and beyond.

Over the long term, I think the commission’s financial analysis in this docket on the harmful effects on Postal Service liquidity of the Retiree Health Benefit Fund obligations will help the legislative process to spur a solution to real, underlying causes of the Postal Service’s liquidity crisis.

Q: What kind of message do you think the PRC’s decision sends the USPS and the mailing industry as a whole?

A: The decision in the exigent rate case tells mailers—as it should inform everyone—that the commission is an objective, independent, and professional decision-making body that can be trusted to apply the law carefully and fairly as the framers of the law intended.

Q: How would you like to see the USPS react to this decision as far as measures taken to take a firmer hold of its financial situation?

A: Postmaster General Potter issued a fine statement on the commission’s decision, which detailed some of the many options the Postal Service has available to pursue: They must watch their spending, continue to improve operations to control costs, pursue new growth opportunities, and work with Congress and the constituencies in the postal community to resolve the funding issues that lie at the heart of its liquidity crisis.

As the commission pointed out in its decision, the Postal Service has done a good job matching its work hours to its changing workload. This needs to continue.

Q: Many mailers were relieved at the PRC’s decision. What should they take from this ruling?

A: This is not simply about an individual rate case decided by the commission. The central issue is the future of the Postal Service, its place in our society and its role in the lives and success of American citizens and businesses.

All have to flourish for the system to be successful, and that will require significant changes to accomplish. The commission’s detailed findings and analysis in the exigent case clarified important issues that can help develop consensus and spur a long-term postal solution for the nation.