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BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268-0001
POSTAL
RATE
AND
FEE CHANGES, 1997
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Docket No. R97-1
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OPPOSITION OF THE UNITED STATES POSTAL SERVICE TO OFFICE OF THE
CONSUMER ADVOCATE MOTION TO COMPEL ANSWERS TO
INTERROGATORIES
OCAIUSPS-71-73,
74(a) and (b), 75(a) and (b), 76-78, 84, 85,
86(i) AND OCAIUSPS-T5-42
(October 27, 1997)
The United States Postal Service hereby opposes the Office of the Consumer
Advocate Motion to Compel Answers to Interrogatories
75(a) and (b), 76-78,
(“OCA Motion”).
is irrelevant,
OCAIUSPS-71-73,
84, 85, 86(i) and OCA/USPS-T542,
74(a) and (b),
filed on October
10, 1997
Despite the OCA’s arguments to the contrary, the requested information
burdensome
to produce, and, in some instances, can be produced by the
OCA itself.
The “Road
Map” Interrogatories
With regard to interrogatories
78 and OCA/USPS-T5+2,
OCAIUSPS-71-73,
the OCA basically argues that every time the Postal Service
proposes a changes in costing methodologies,
map” showing
workpaper
74(a) and (b), 75(a) and (b), 76-
it is required to provide a detailed “road
every page, line, column and row of every piece of testimony,
every
and every library reference that has changed because of the new costing
methodologies.
The OCA argues this despite the fact that the Postal Service’s case is
extensively documented
in accordance with the Commission’s
rules, and despite the fact
that the Postal Service has presented an alternate cost presentation
under Rule 54(a)(l)
2
which shows the impact on the Postal Service’s proposals
of using the methodology
followed in prior cases concerning the treatment of mail processing
as other previous costing methodologies.
See Libraty References
labor costs as well
H-796 (2nd revised)
and H-215 (revised).’
The OCA cannot seriously
required under the Commission’s
and in a sufficient format,
contend that the extensive
documentation
rules does not present information
already
of adequate detail
The fact of the matter is that regardless of the Commission’s
rules, the OCA simply does not want to undertake the effort required to understand
Postal
Service’s
interrogatories,
case
by delving
into that
The OCA has demonstrated
case
and
that it understands
asking
specific.
the
pointed
how to review the Postal
Service’s case and determine what would change as a result of the new mail processing
costing methodology.
See genera//y, Tr. 12/6347-48.
The fact that the OCA prefers to
devote its energies to other endeavors is no excuse for imposing unwarranted
on the Postal Service that is burdensome
discovery
and is irrelevant to the case the Postal Service
is presenting.
The OCA’s reliance on revised Rule 54(a)(l)
its motion is misguided.
and Order No. 1197’ in support of
The goal of revised Rule 54(a)(l),
as expressed in the language
of the rule, is to have the Postal Service present “an alternate cost presentation...that
’ It is assumed that the “old” methodology for mail processing labor costs referred
to by the OCA encompasses both the 100 percent volume variability assumption as well
as distribution of costs based solely on IOCS tallies.
’ Order Accepting Certification and Granting Major Mailers Association
Compel, Order No. 1197: October 1, 1997.
Motion to
3
shows what the effect on its request would be if it did not propose changes in attribution
principles.”
Rule 54(a)(l).
The “road maps designed
calculation,s under an assumption
i.e., using the methodology
References
information
from those library references
the road map itself.3
language
quoted
A to this pleading
is available
for the OCA to
Order No. 1197 makes clear, in ,the very
obligations
changes extend to providing all participants
providing a comprehensive
participants
Likewise,
by the OCA, that the Postal Service’s
of the impact of its proposals.
reference
that mail processing costs are 100 percent variable,
See OCA Motion at 7. As Attachment
construct
costing methodology
OCA to perform
followed in prior cases” are contained, in large part, in Library
H-196 and H-215.
demonstrates,
to enable
Those obligations
when proposing
with adequate
do not and should not encompass
listing of every line of every testimony, workpaper
that would change.
notice
There is and should be an obligation
and library
on the part of
to do their own work, and not use discovery as a mechanism
to have the
Postal Service do it instead.
The burden involved in responding to discovery requests need only be specified
“to the extent possible.”
Rule 25(c). The Postal Service has not been specific about the
burden involved in answering these interrogatories
involve
having
because it cannot be. Responding
to OCA/USPS-T542
would
every
costing
witness
review
his/her
testimony, workpapers
and library references and prepare a listing of every item that has
3 The columns in Attachment A titled “PRC Component” and “USPS Component”
taken directly from Section 12 of Library Reference H-196.
are
4
changed, presumably
as compared with Docket No. R94-1.’
likely would not perform this task in isolation.
interrelated,
In addition, the witnesses
Because the various testimonies
witnesses would be required to check back and forth among themselves
are
to
determine if changes in one witness’ numbers would require changes to other witnesses’
numbers.
The effort involved would obviously be immense.
The OCA essentially
is
asking for the Postal Service to list every reference that would change had it presented
an entirely different case.
Attachment
demonstrates
A to this pleading,
which took two full person
what such a partial listing would look like for Base Year 1 996.5 ,A similar
listing would have to be prepared seven more times-for
workyear
mix adjustments,
adjustments,
days to prepare
FY 1997 before volume and
for FY 1997 after volume mix and before ,workyear
for FY 1997 after volume mix and workyear mix adjustments,
mix
for TY 1998
4 A review of the question makes clear that OCA is not merely asking about the
change from the 100 percent volume variability assumption in mail processing costs.
Rather, the interrogatory covers additional changes, including the incremental costing
methodology
presented by witness Takis, the highway transportation
variabilities
presented by witness Bradley, the city carrier changes presented by witness Nelson, and
the window service variabilities presented by witness Brehm. The overbreadth of the
OCA’s request can be seen by comparing the introduction of subpart (a) which purports
to cover “significant changes to cost attribution methodology” with sub-subpart (ii) which
requests that the Postal Service identify whether such changes cause the “level of
attribution to increase, decrease, or remain the same.” Under the OCA’s all-inclusive
definition, even a mere update of a previously furnished study seemingly would be
covered.
Interrogatories OCAIUSPS-72 and 73 request information similar to that
requested in OCAIUSPS-T5-42 for Base Year and Test Year changes due to the new
mail processing costing methodology.
5 This partial listing alone covers 212 citations. It should be noted that the items
listed in Attachment A are footnoted. Thus, the OCA and any other participant has the
capability of preparing exactly this same listing themselves.
-------
r
5
before rates before workyear mix adjustment,
mix adjustment,
for TY 1998 before rates after workyear
for TY 1998 after rates before workyear
1998 after rates after workyear mix adjustment.
it covers only the changes
processing
fourteen
resulting from assuming
the prior methodology
A-l
and A-2.’
for the interim and test years thus would consume
additional
calendar
and for ?Y
Moreover, the listing is partial because
labor costs and only Base Year workpapers
similar information
mix adjustment,
for mail
Provision
of
a minimum
of
days (two days times the seven interim and test year
iterations) and would be nowhere near complete.
Further, this estimate does not even
take into account the listings which would have to be provided by every other costing
witness who uses base year or test year cost figures and it does not take into account
the time needed to explain whether the changes caused costs by component
subclass to increase, decrease or remain the same.
and by
It takes months to prepare a rate
case; it should not be doubted that months could be consumed in basically “undoing” it.
Interrogatory
OCNUSPS-71
asks that each rate design witness provide a listing
of the necessary steps to change each rate element if mail processing labor costs were
assumed to be 100 percent volume variable.
the sense that a list of mechanical
The information
requested is irrelevant in
steps does not really address what the rate design
witnesses do. Setting rates is an iterative process.
Rates are set and reset in order to
take account of such factors as revenue leakages and constraints
relationships-for
example,
the relationship
between
due to other rate
parcel post and Priority
6 If all Postal Service costing changes are considered, only Cost Segments
17 and 19 -- four out of nineteen segments -- are unaffected.
Mail.
1, 15,
6
Moreover, requiring each witness to go through all materials and list every change would
be unduly burdensome.
of USPS-T-37,
As just one example, Attachment
B to this pleading is a copy
WP 1.1,page 2 of 3. Everything on the page would change, other than
the three circled items.’
Interrogatories
addition,
OCANSPS-74-76
OCAIUSPS-76
OCNUSPS-74
information,
requesting
essentially
are basically subsets of OCAIUSPS-T5-42.
is another way of asking the questions
In
posed in
and 75. The OCA’s refusal to avail itself of other means to obtain the
such as reviewing the library references
technical
conferences,
preparing
its own analysis
Moreover,
as with interrogatory
certain of the information
and asking specific questions
or
should not relieve it from doing its own work and
of what has changed
OCANSPS-71,
in the Postal Service’s
the process of ultimately
proposal.
developing
is likely to be an iterative process, involving some trial and
error. Thus, any listing of steps may well turn out to require adjustment
or modification,
If the OCA wants to achieve the results its questions imply, then it should be attempting
to make its own calculations
and address questions about those calculations
results obtained to the Postal Service.
and the
This would be a more fruitful endeavor for both
the OCA and the Postal Service than asking for lists of changes or steps in a vacuum.
Moreover,
calculations
the requested
information
would be burdensome
to produce.
To begin, all
underlying the piggyback factors in Part 2 of Library Reference H-.77 would
have to be reviewed to determine all steps that would need to be changed.
efforts could take several days.
Similarly, Library References
This review
H-106 and H-1’46 would
’ This in only one of hundreds of pages in the USPS-T-37 workpapers
7
have to be examined to determine whether and what changes would be needed before
any listing could begin.
The Alternate
Cost Presentation
Interrogatories
OCAIUSPS-77
Interrogatories
and 78 ask a number
nothing to do with the intent of revised Rule 54(a)(l),
of questions
that have
which is to give notice of the
impact of the Postal Service’s proposed costing methodology
changes,
The OCA never
bothers to explain how this purpose is served by a series of questions dealing with the
mechanics of how the Postal Service replicated the Commission’s
For example,
the OCA asks about “programming
Commission’s
cost model programs.
Service’s
obligations
requirement
mode/.
under either
analyses”
costing methodology.
and “logic errors”
It cannot seriously be maintained
revised
Rule 54(a)(l)
in the
that the Postal
or Rule 25 embody
any
that the Postal Service provide a tutorial on how to run the Commission’s
Neither revised Rule 54(a)(l)
nor Order No. 1197 can be read to mandate such
a result.
The CAG Interrogatories
The OCA Motion to Compel was tiled prior to issuance of Presiding
Ruling No. R97-l/48
(“Ruling No. f?97-1/48”).B
moot with regard to OCAIUSPS-84,
and 35.
That ruling makes the motion to compel
85 and 86(i), which ask for various cost information
broken out by CAG. In fact, OCWJSPS-86(i)
in OCA/USPS-34
Officer’s
requests the same information
requested
The Postal Service will not repeat the arguments
’ Presiding Officer’s Ruling Denying Motion to Compel Responses
T5-34-36, October 17, 1997.
in its
to OCANSPS-
8
pleadings
concerning
reference,
as the
those
same
interrogatories,
effort
would
but rather
incorporates
need to be undertaken
them
here by
to answer
these
interrogatories
as would have been required to answer numbers 34 through 36.9 Ruling
No. R97-l/48
held:
From Postal Service’s pleadings, it appears plausible that accurate
breakdowns of its accrued costs by CAG would require a considerable
amount of analytical effort in addition to the data processing task of
associating facility finance numbers with CAGS. Imposing this substantial
burden on the Postal Service is not warranted where the OCA has given
no indication as to how it could use CAG breakdowns of accrued costs in
its direct case, and no potential use of such information is self-evident.
Ruling No., R97-V48
at 2. There is nothing in the OCA’s instant Motion which would
cause a change in the result of that ruling
The OCA provides only minimal additional information on why it desires the CAG
information,
stating that it is “related to development
cost estimates and allocations
vague reference
concerning
of OCA’s direct case in developing
post office boxes.”
still does not provide the appropriate
OCA Motion at 8. This
“nexus between the information
sought and evidence that would be relevant and material to the substantive
decided....”
Presiding
Officers
Ruling Denying
Compel Responses to Interrogatories
Ruling No. R94-l/40,
issues to be
Motion of United Parcel Service to
UPS/USPS-T1 l-16,
17 and 18, Presiding Officer’s
June 27, 7994, at 5. Moreover, given the assumptions
that would
have to be made and the burden involved regarding AP 14, as well as the year-end audit
’ See Objection of the United States Postal Service to Office of the Consumer
Advocate Interrogatories OCAIUSPS-T5-34-36,
September 22, 1997; Motion for Late
Acceptance and Opposition of the United States Postal Service to Office of the
Consumer Advocate Motion to Compel Responses to Interrogatories OCANSPS-T5-3436 to United States Postal Service Witness Alexandrovich, October 6, 1997.
9
adjustments
and expense reallocations,
the OCA’s cryptic explanation
of its desire for
the data is not suf5cient to outweigh the problems that would be encountered
Postal
Service
in producing
the information.
The fact that the Commission
by the
has
expressed some interest in the possibility of an alternative grouping of post office boxes
does not negate the fact that CAG groupings are not designed to reflect cost accrual or
development.
assumptions
It also does not relieve the Postal Service
and incurring a substantial
of making
unsupported
burden in responding.
Conclusion
For all of the foregoing
reasons,
as well as the reasons stated in the Postal
Service’s initial objections, the OCA Motion to Compel should be denied.
Respectfully
submitted,
UNITED STATES POSTAL SERVICE
By its attorneys:
Daniel J. Foucheaux, Jr.
Chief Counsel, Ratemaking
.’
k--&//j&
Susan M. Duchek
475 L’Enfant Plaza West, S.W.
Washington, D.C. 20260-I 137
(202) 268-2990; Fax -5402
October 27, 1997
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10
CERTIFICATE
OF SERVICE
I hereby certify that I have this day served the foregoing document upon all
participants of record in this proceeding in accordance with section 12 of the Rules of
Practice.
,/2& /ii
Susan M. Duchek
475 L’Enfant Plaza West, S.W.
Washington, D.C. 20260-l 137
(202) 268-2990; Fax -5402
October 27, 1997