Important Postage Update

Court Rules on end to 2014 Exigent Rate Increase

On Friday, June 5, 2015,  the DC Court of Appeals issued its decision on the exigent rate case.  The court affirmed the most significant element of the ruling by the Postal Regulatory Commission back in late 2013, namely, that the increase could not go on forever.

But the court remanded another aspect of the Commission’s order, and it is now almost certain that the exigent increase will be extended beyond August, when it was expected to end.  Depending on how the Commission does the next round of calculations, the increase could continue into the spring, or perhaps even longer.

The increase went into effect in January 2014, and as of March 31, 2015, the Postal Service had collected almost 80 percent of the $2.8 billion it says it lost as a result of the depression.  At the current rate of generating contribution — about $150 million a month — the exigent increase would have reached the authorized limit at the end of August.  The court’s ruling, however, means that the Commission will need to do some more calculations for how much additional contribution the Postal Service can take in.

If the Commission were to determine that the Postal Service is in fact due another $1.2 billion, the exigent increase would continue another eight months or so.  Rather than ending this August, it would continue until April 2016.

Given the complexity of the issues still on the table and the amount of money at stake, it’s possible that the case may end up back in court a third time.  In the meantime, the exigent rate increase remains in place.  Not forever, but longer.


Editor’s Note:  We believe that a likely scenario will be for the USPS to request a Consumer Price Index-based rate increase in early 2016.  If the current CPI continues to hover around 2%, that would mean a rollback of the 4.3% exigent increase from 2014 combined with the CPI-based increase for a net reduction of just over 2% off of current 2015 rates.  Combining the increase and price rollback would  eliminate the cumbersome process of having to make two rate changes within a three to four month window.

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