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PRC Issues Opinion on Postal Rate Increase Request

The independent Postal Regulatory Commission today recommended a U.S. Postal Service rate increase, which may be implemented as early as May. The Postal Service filed the request last May explaining it would otherwise lose $5.9 billion in 2008. The Commission found additional income necessary to satisfy the “breakeven” requirement that postal revenues match costs.

The Commission recommends that the price of a First-Class stamp rise by two cents, to 41 cents. The Postal Service had proposed a 42 cent First-Class stamp.

The Commission also approved the Postal Service’s “Forever Stamp” proposal – specifically designed to ease the public’s transition to new single-piece letter rates. Forever Stamps will be sold in reasonably limited quantities for the price of a First-Class one-ounce letter, and continue to be worth the price of a First-Class one-ounce letter even if that price changes. “This is a prime example of the Postal Regulatory Commission working together with the Postal Service in the best interest of the citizen mailer,” said Chairman Dan G. Blair.

The decision follows an administrative proceeding involving mailers, employee organizations, consumer representatives and competitors. While the rate increase will impact numerous classes of mail to varying degrees, the average rate increase will be 7.6 percent. The rates proposed by the Postal Service equate, on average, to an 8.1 percent increase.

According to Chairman Blair, “In nearly every category of mail, including non-profits, the Commission approved rate increases equal to or below the Postal Service’s request, while still meeting the Service’s revenue requirement.”

Here are some representative changes that are being recommended to the initial application:

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