DOCKET SECTION
POSTAL RATE AND FEE CHANGES, 1997
INITIAL
Docket
No. R97-1
BRIEF OF THE
AMERICAN PUBLIC POWERASSOCIATION
Euaene E. Threadaill
suite
200
1493 Chain Bridge
McLean, Virginia,
(703)
(703)
April
1,
1998
734-1918
734-1943
Rd.
22101
TABLE OF CONTENTS
Page
I.
II.
NATURE OF THIS CASE
IMPACT UPON THE PUBLIC
III.
IV.
RATE HISTORY
RATE MAKING CRITERIA SUPPORT
A DECREASE IN CARD RATES
A. THE VALUE OF PRIVACY
B. COMMUNICATION QUANTITY
C. DEMAND PRICE ELASTICITY
D. RATE SIMPLIFICATION
4
5
z
V. WORKSHARINGCARD RATES ARE EXCESSIVE
7
A. CLASSIFICATION HISTORY
B. A SENSIBLE APPROACH
(T) Cost Coverage
(2) Unit Contributions
to Institutional
VI.
7
9
Costs
10
11
REVENUE IMPACT OF CARD RATE REDUCTIONS WILL BE MINIMAL 13
VII.
PRESENT AUTOMATION CONDITIONS ARE BURDENSOME
14
VIII.
SUMMARY
A. Single-Piece
Card Rate
B. Basic Presort
Rate
C. Automation
Eligibility
14
14
15
16
TABLE OF AUTHORITIES
Postal
Study,
Service,
House
1916
Committee
on Post Office
National
Association
of Greeting
569 F.2d 570 (CADC 1976)
Associated
662
Third Class Mailers
F.2d 767 (CADC 1980)
and Civil
8
Publishers
v. USPS
10
Ass'n
v. USPS
10
I.
This
Brief,
rate
Section
I,
increased
for
to
provides
the
and
present
all
of
reductions
the
impose
present
the
the
rates
for
post
cards
recognizing
provided
most
that
the public
- the post
card.
post
was the
card
families.
alternative
still
occupy
gas,
water,
of
our
in
make
rate
card
rates,
Basic
in post
and will
needs
a low
demonstrates
and
presort,
card rates,
continue
cost
that
and should
is
history,
vital
a very minimal
essential
city,
case
Power Association
have
Nations's
In the years
a central
this
and inconsistent
Public
are excessive
those
to
means of
all
of
the
be reduced.
IMPACT UPON THE PUBLIC
with
to written
Many county,
which
communication
In today's
of
to
(Single-piece,
increase,
herein
clearly
excess
line
Past increases
public
II.
Throughout
of
increases
card rates
The record
in
discretion
out
proposed
one-cent
damage upon
communication.
are
filed
available
Consequently,
broad
categories).
proposed
far
The American
in all
Automation
now
revenues
rates
The OCA's Initial
USPS has inadvertently
facts
as
with
standards.
(APPA) opposes
the
case.
standards.
Commission
statutory
and all
which,
statutory
where
unusual
that
generate
meet
reductions
a most
explains
would
required
requests
is
rates
demonstrate,
with
case
NATURE OF THIS CASE
of the Great
the
citizens,
Depression,
communication
telephone
communications,
core
its
government,
has
cost means of communication
means of
world,
to
our
provides
but
written
the penny
among many
a widespread
communications
in our society.
and town governments
and sewage services
to their
1
provide
residents,
electricity,
and many use
cards
of
to bill
the
customers
services
general
public
billing
cards.
purposes.
bears
try
possible
objective.
impacted
customers-for
postal
MC95-1;
round
receive
electricity,
owned service
The
obstacles
rate
categories.
eligibility
digit
substantial,
most
water
for
billing,
(Tr.
card
and sewer
to
impact
be
(Id.1
low
cost
to bill
increases
impose
rate
for
Automated
access
serve
all
2
who
20110247.
cards
to the
impose
of
Automated
automation
the
resulted
rate
users
Tr.
stringent
abolition
agencies
customers
many of the mailers,
categories,
postal
a second
from municipally
businesses.
having
in
in Docket
the
small
with
Government
services,
case,
The
combined
and unanticipated,
billers.
recent
have prevented
from
presort
rates.
businesses
small
that
will
a very
and sewer services
20/10247).
conditions,
and carrier
this
conditions
which
in card
major
adversely
and other
to automation
use cards
in
gas, water
eligibility
to achieve
of the reclassification
will
providers,
which
suffered
as a result
which
at the
rendered.
USPS proposes,
increases
billing
entities
make available
services
for
and commercial
use cards
and
the
and receiving
to the public
increases
agencies
Thus,
use cards
and commercial
to
have already
costs,
and the
of
service
essential
cards
services
and where possible,
government
Card billers
their
basic
be directed
for
post
also
The cost
cost.
of governmental
by the proposed
The USPS should
service
array
20/10246.
billing
of mailing
to provide
cost,
Tr.
the
businesses
a broad
These public
severely
postal
the cost
is
services.
includes
Some small
which
lowest
those
provided
There
entities
for
in
increase
providing
in
3 and 5-
in
a very
1996
for
electricity,
a market
area,
and
have a very
able
high
to use the
density
for
carrier
route
reclassification.
presort
effectively
automation
barred
carrier
presort
cents.
(Tr.
rate
The present
rate
the
statutory
also
by those
the proposed
All
reduced,
increases
eligibility
cards
for
for
Presort
for
billing
rate
of
the
18.0
a totally
is far
established
by
the
Presort
of
18
standards.
card rates
cards
relationships,
rate
Postal
cents
is
should
and presort
are excessive
out
and
The Commission
in the single-piece
of the existing
not
Basic
statutory
of
Presort.
standards
The present
to
of conditions
now requesting
card/letter
Act.
rates.
to the Basic
Basic
prior
- 12.5% - from
1996
post
Reorganization
reject
in
of 20 cents
by
excessive
of
rate
historical
cents,
elimination
users
single-piece
the
16
from
USPS is
for
With
excessive
of
bills
increase
The
cent
19
the
cents,
16
20/10248)
unjustified
line
many card
rate
of
rate
Most of them were
and the imposition
many of
a dramatic
mail.
of reclassification's
category,
categories,
experienced
of
rate
billing
presort
As a result
the carrier
which
their
card
and should
be
increased.
III.
RATE HISTORY
RESTORE THE POSTCARD/LETTER RELATIONSHIP
Throughout
government
provided
communication.
in effect
1952,
history
for
was only
of card
Since
post
The long
about
our
of
most
cards
rates
Service
until
1886
or one-third
and letter
the Postal
traditional,
from
65 years,
one-half
as the lowest
standing,
Federal
means of public
"penny
post
1918 and from
rate.
card",
1920
to
See the
20/10249-10251.
became "self
3
cost
of the letter
at Tr.
the
history,
nation's
sustaining",
the basis
for
increases
Service
in
is a very
with
the postal
and
the
increases
cost
of inflation
rate
classes
cards
compounds
actions,
and equitable"
A.
between
Commission
postal
of mail
An
this
in
to recover
increase
the
in all
increases
a 27% increase
See Tr.
case
R90-1
cent
18
through
letters.
and provide
for
cards
and earlier
card
rate
the public
and that
The Value
First-class
service
address
provided".
20 cent
of
must
and costs
rate
Reorganization
The first
rates.
values
the present
criteria,
on
would
with
an
THE RATE MAKING CRITERIA SUPPORT
A DECREASE IN CARD RATES
the
of the relative
that
relationship
3622 (b) of the Postal
which
value
established
offset
means of communication.
Section
"the
in
be rejected.
IV.
criteria
proposed
should
costs,
approved
increase
and it
adjusted
discriminatory
Class
base
the historical
policy
in First
inequitable
also
passed
percentage
where the Commission
the
inexpensive
proper
not the very
and a 15% increase
are
be
contracts
adjustments,
in labor
must
But the
Its
of living
employees
is an across-the-board
The one cent
20/10252.-
restore
rates.
The Postal
industry.
cost
productivity,
in R90-1,
inflation.
Those increases
and categories,
implemented
in post
in
in postal
annual
supervisory
COLA.
been
service
require
of
increases
has
intensive
unions
to reflect
any
rates
labor
salaries
annually
by
postal
card
should
Privacy
Letters
in establishing
factor
is
excessive
not
- The primary
and Standard
4
"fair
is
An examination
and cards
be reduced,
the
to be evaluated
53622(b)(2).
of letters
rate
Act provides
demonstrates
by the
statutory
increased.
difference
Letters
is
in
that
value
First-
class
letters
card,
like
are
Standard
no possibility
economic
postal
private
and sealed
mail,
rate
communication.
and the
case,
card
the Administrative
"cannot
be used
enjoy
privacy,
the message that
3/A/394.
privacy/n0
privacy
letter/card
relationship.
from 6 to 24 times
card.
(Tr.
should
relationship
in
rate
of
that
C.
is
lower
Price
cost
(USPS-T-30,
the
service
own-price
provided.
reported
capacity
of
of the letter
of
the
p.
4)
O'Hara
price
elastic
cards
of
(those
recognition
to the
a
reasonable
that
letter
is
on a
which has from 4 to
not
the
have a postal
most
a service
is the price
O'Hara
higher
Own-Price
(USPS-T-30
First-class
letters
Private
cards
Private
One of
As witness
the
Docket
rate.
value
elasticity,
don't
can be written
should
markups and coverage,
The "Long-run
by witness
-
post
limited..."
pages)
that
a letter
that
of information
(4 double-sided
Elasticity
measures
establishing
- The quantity
first
they
determining
A means of communication
60+ percent
Demand
quantitative
demand.
the
is
in the
In the
contents,
give
as much as information
20/10256).
17 percent
valuable
can be sent
by a one ounce
has value
value.
a
provides
Law Judge observed
enclose
Quantity
But
a card
Privacy
The Commission
B. Communication
can be conveyed
to
view;
has no privacy
cards
No. R71-1,
inspection.
is open to public
of private
world,
against
significant
provided,
in
elasticity
of
has testified,
is
the
value
the
of
Demand Elasticities",
p.5)
the
as
are as follows:
-0.232
-0.944
not
as First-Class
printed
letters;
5
by the USPS) are 4 times
that
indicates
that
as
the
service
provided
letter
value.
clearly
for
cards
is
The dramatic
requires
a far
in
the
range
difference
lower
of
one-fourth
in demand price
cost
coverage
for
of
elasticity
cards
than
letters.
USPS regularly
uses "Ramsey Pricing"
as a methodology
designing
rate
from variable
The testimony
Witness
Roger Sherman demonstrates
that
would
far
exceeds
revenue
That
mark-ups
be generated
(by
under
Ramsey pricing
the
cards,
0.28,
except
for
also
average
of communication,
and totally
(Id.
of line
for
standard,
class
letter
rate
should
cards
rate
per dollar
as compared with
rate.
differences
is quite
D. Rate
addressed
recently
is
filed
and with
18
cent
that
of
Errata
contribution
other
for
subclass
elasticity
The present
33 cent
that
by every
Single
statutory
piece
Firstcard
and a 33 cent
the historical
in
20 cent
in the single-piece
card rate,
letter
relationship
standards.
Rate Simplification.
the
quantity
Increases
of a letter.
- One criterion
to
21.
card
- demonstrate
excessive,
with
statutory
Simplification
p.
proposed
every
impacts
increase
would be far more consistent
20/10250)
permissible
in demand price
the proposed
an
cents)
of privacy,
unjustified.
The proposed
be rejected;
per piece
(19.72
the
of
Loss for
Ramsey pricing
cards
with
for
of OCA
See OCA-T-300,
- privacy/lack
are totally
for
rates
for
p. 35).
of "value"
tremendous
out
single-piece
(Tr.
Loss"
revenue
the highest
that,
does not have 60+% of the value
the rates
rate,
demonstrates
mail.
card
cents).
would exceed the Welfare
Express
the total
per piece)
(13.97
"Welfare
These aspects
a card
that
proposed
6 cents
almost
testimony
rates,
by the
costs.
the
testimony
6
that
has rarely
53622(b)(7).
of
its
witness
been
The USPS
Miller,
addressing
would
the response
result
present
from
of the public
the
CEM proposal.
system of first-class
overpaying
for
mailing
a
letter
of 3 stamps - 32 cents
23 cents
for
parties
rate
second
have presented
far
exceeds
21/10831,.
for
times
as much as a Standard
for
each additional
stamp,
which
cards,
would
convenience
an
incremental
ounce
the
costs.
first
(See
ounce,
Establishing
ounces
that
four
an
18
of letters,
endorse
could
Tr.
and 18
would cost
Commission
simplification
have
be
that
rate
a
great
to the public.
In short,
and rate
a
to avoid
Other
letter
additional
the
the
a card.
a one pound letter
be used for
under
must
for
(A) ECR package.
CEM, should
be
for
that
ounce of a letter,
the 23 cent
per-ounce
ounce,
could
and for
category,
that
that
card,
the first
33 cents
cents
cent
for
post
system
in order
and 20 cents
incremental
With
is
the public,
or
ounce,
evidence
10837-E).
The fact
rates,
inventory
the
to a "two-stamp"
privacy,
communication
simplification
all
support
quantity,
price
an 18 cent
stamp.
elasticity,
V. WORKSHARINGCARD RATES ARE EXCESSIVE
A. Classification
Reorganization
equitable,
equitable
problems
Act
and
sharing"
that
requires
Section
first-class
the
mail
standards.
Section
3622(b)(3)
each "class
of mail"
or "type
Commission
have,
over
the
of the Postal
rates
requires
schedule
has plagued
3622(b)(l)
postal
3623(b)(l)
classification
that
- Section
History
be
fair
and
a
fair
and
One of
the
that
be established.
issue
is
of
setting
rates
for
to
apply
those
statutory
how
requires
of mail
years
7
attribution
service".
of
regulation,
of
"work
costs
to
The USPS and the
created
two
additional
"classifications"
"subclasses"
which require
which
allow
arbitrary
rates
that
will
Docket
the
"Interim"
presort
cost
Mail
the House Committee
recommended
1976,
"subclass".
creation
1979,
4 subclasses:
Mail,
and Priority
rates
Docket
No.
declared
categoryU,
totally
Docket
Class
ignoring
First-Class
proposal,
but
expanded
and Postal
Cards,
-
that
of
case,
(DMCS) was
included
was referred
Postal
a bulk
to
Study,
by
all
published
Service,
Basic
Mail
by
December
and Carrier
1,
Presort
by the Governors,
effective
Postal
Mail
the
subclasses
next
Mail,
own Rate
Mail
rate
The
First
to create
Mail
101.
the
a "rate
101.
Zip+4 as a new
Commission
Class
case,
was merely
the DMCS and Rate Schedule
in each of the
Presorted
had its
postal
Presorted
DMCS 100
divided
and Post Cards,
- The USPS proposed
Presorted
was expressly
were shown on Rate Schedule
the
Mail.
case,
decision,
DMCS 100,
Mail,
In
Reclassification
In the Commission's
Each of those
R80-1
Subclass
categories
Mail,
Presorted
No. MC83-2
it
1975;
and Civil
and adopted
Mail.
for
of
p. 54).
Regular
Commission
as rate
6,
of a broader
1978,
First
prescription
Schedule
which
DMCS was established.
into
Schedule;
July
-
categories"
classification
Classification
on Post Office
November 29,
30,
postal
No. MC76-5 - In the major
the permanent
April
first
A contemporary
(See Report,
Docket
issued
categories".
service
as a "subclass".
and the
"rate
and made effective
mail
standards
and "rate
calculations
- In the
Domestic
different
attribution,
other
MC73-1
first-class
parties
cost
subsidize
No.
established,
with
rejected
that
to include
Zip+4
Subclasses
- Regular
and Priority
Mail.
Mail,
Post
Docket
No.
Presorted
Mail
separate
which
without
Presorted
Mail
Cards,
is to treat
separate
those
but
such -a formal
for
although
category,
fairness.
in terms
Service.
(See 21/11160-l).
ability
of preparation
in establishing
has recognized
that
29,
factors
to be given
testimony
first
fair
48,
judicial
reduce
and Post
and
to pricing
mail
as two
as "subclasses",
a necessity
Richard
Bentley
nor
as a rate
the two types
of mail
characteristics,
manner
in
which
savings
they
requires
are
Postal
that
be taken
the
into
rates.
The USPS
single-piece
entry,
preparation
in designing
the
to the
by mailers,
a
has pointed
is characterized
and equitable
McBride,
the
In the new Standard
such as bulk versus
of Charles
Mail
approach
3622b(6)
performed
consideration
32, 33, 41, 44,
In the
Section
to
neither
cost
and customer
compatibility,
No. MC95-1,
to yield
of mail,
consideration
factors
the
So
100
first-class
of physical
work-sharing,
a
101.
A ECR is a "subclass",
and their
automation
presort
Basic
processed,
degree
is
DMCS, with
mail.
DMCS
p.347).
As MMA witness
First-class
mailers'
personal
are identified
classification
having
to recommend rates
- One common-sense
of services
that
the
of Regular
(See OCA T-300,
and Standard
of
ability
and work-sharing
kinds
in
rewrote
Rate Schedule
Approach
have many similarities
manner
perceived
to subsidize
category"
single-piece
class,
its
notice,
and deleted
Mail
out,
mail
to a "rate
services.
criterion
jeopardized
any
B. A Sensible
Commission
as a "Subclass"
business
Commission,
The
identified
Rate Schedule,
require
Postal
-
R84-1
of
rates.
USPS T-l,
mail,
are
(See Docket
pp. 25, 26, 28,
51, 52.)
decision
9
to review
a postal
rate
case,
National
570,
Association
585 (CADC
of Greeting
Card Publishers
the Court
1976)
v. USPS, 569 F.2d
stated:
Under the subsection
[3622(b)(3)]
each service
must bear the
postal costs "attributable
to [it]"
and in addition
must also
bear that portion
of all other costs "reasonably
assignable
to
[it].
Thus, the very words of subsection
(b)(3)
disclose
its
concern that each class of mail and postal
service
should
shoulder
all
the postal
costs
that
may be traced
to the
provision
of that class or service.
(Emphasis added)
Although
procedural
that
Court
grounds,
decision
was
(see Associated
Third
USPS, 662 F.2d
767
equitable
rates
requires
each kind
of
should
service
recognize
provided
to
eligibility
should
(CADC
bulk
mailers,
of system
(1)
directly
First-class
for
to avoid
pp.402-3;
costs
Ass'n
v.
fair
and
responsibility
for
The Commission
and service
stringent
services,
mailing
each of which
and a reasonable
case,
it
pages
is
requirements.
mail
IV-33-4,
in order
rate
share
ft.
R90-
approved
higher
cost
appropriate,
in
considered
that
increases,
cost
excess
coverages
(the
(See R87-1,
But
p.IV-16).
proposed
of
rates
correct
recommend
revenue
t0
some rate
back in line.
aggregate
in
would
has the opportunity
and to
cards
10
rates.
the
the Commission
In the case of "worksharing"
R87-1,
16; R94-1,
in
to bring
cases,
Third-class
substantially
rate
it
clear
Consequently,
some proposed
than
higher
perfectly
revenues
three
has reluctantly
recommending
R90-1,
reductions,
different
- In the last
coverages
reject
cost
on
costs.
Cost coverage
generate
that
meet very
attributable
the Commission
this
perception
to the public,
who must
1, and R94-1,
order
Mailers
incisive.
provided
are quite
vacated
Class
of
remains
service
conditions,
bear its
recognition
provided
that
the
1980),
ultimately
of presorted
and automated
cards)
the projected
cost
coverage
USPS-30B, Revised,
p. 43).
That
below the 200% cost
coverage
for
worksharing
to
Institutional
is a cost
is 184%. (Exhibit
coverage
only
letters
slightly
and is clearly
out of line.
(2)
there
Unit
has been a significant
Service
and the
calculating
The
Contributions
Postal
recorded
F" "cost
difference"
significant
mail
methodology.
methodology
also excludes
familiar
bulk,
system
the
desks
mail
where mail
the
of
than
are
and the remaining
must be carried
Those
by trucks
pulled
out
pieces
to the outgoing
of
far
the
less
conditions,
cost
drops,
mail
the
public.
postal
Postal
that
can't
system
burdens
boxes,
of
and
singleoffices,
go through
for
separate
facerfcancelers,
operations
on
carriers
post
stream
many
between
mail.
pieces
go through
sorting
11
differences
bags and boxes
of
its
developed
to originating
racks;
actual
consistently
by the general
from mail
businesses.
and
from consideration
single-piece
mail
is dumped on culling
has
and automation
imposes
for
Class mail.
ignores
and
operations
mail
use
But the Commission's
system
the
public
must be carried
facer/cancelers
handling,
with
operations
up general
piece
the postal
presorted
must pick
front
to meet presort
into
that
cost
recorded,
to
hypothetical
Commission
difference"
delivered
knows that
totally
years,
the Postal
First
methodology,
avoidance"
by mailers
Everyone
postal
The
For
between
for presorted
a
-
benchmark
methodology
and substantial,
prepared
and mail
avoidance"
"cost
what
advanced
differences.
that
"Appendix
"cost
"cost
cost
rejected
has
split
regarding
discounts"
Service
unacceptable
theoretical
Commission
"worksharing
Costs
where they
and
are
sorted
of
to destination
those
mail
sectional
requirements
- to
- impose major
cost
and in-office
maintenance,
and replacement
- costs
presorted
to destination
loading
docks,
purchase
sale
of
dictates
"cost
that
presorted
by Single-piece
should
not
has long
institutional
costs
subsidization.
See Decision,
total
Unit
cards
is
cents
single-piece
one fact
are
Cost of Single
7.7568
cents.
a unit
cost
that
the unit
piece
should
piece
mail.
postal
in
and
almost
trays
to
for
the
of
the
all
Leaving
aside
techniques,
fairness
to "system"
costs
contribution
the unit
Mail
system
operations.
difference"
burden
recognized
a
per-piece
by
contribution
per-piece
The unit
the unit
cents,
provide
Basic
to system
costs
of
system
presorted
than
contributions
proposed
12
a
a 9.75
21
cent
Presort
rate,
11.24
cents.
If
mail
imposes
far
mail,
and
single-piece
to system costs
contribution
and Presort
The USPS proposes
would
is that
cross
The estimated
cents
it
to
avoiding
19
contribution
not exceed
p. 1)
and a
on the postal
of
is 11.2429
which
contribution
contributions
pages 3037-g.
cards
costs,
unit
means
MC95-1,
rate,
clear,
that
valid
Piece
card
is absolutely
less
bypasses
(USPS-T-29C,
to system
producing
buildings
cards.
The Commission
contribution
and
exceed
and repair,
and delivered
processing
time
is responsible.
retail
per-piece
in,
boxes,
mail
the
avoidance/cost
the unit
cards
mail
system - labor
mail
piece
offices,
stamps,
non-work-sharing
investments
trucks,
which single
and out-going
the complex
of,
All
21/11172-3).
and process
workers,
post
(See Tr.
on the postal
makes no use of
and
collection
for
collect
burdens
by carriers
equipment
centers.
by a presorted
of comparable
single
by the USPS are totally
out of line.
An
contribution
to
Presort
rate
card
even though
than
system
be
"discount"
piece
of
rate.
at
Witnesses
total
is
is
result
amounting
price
significant
revenue
for
burden
on the
a
subsidy
system
Presort
work-sharing
to the
single
and James Clifton
between
clearly
worksharing
Basic
(6.74)
the Basic
differences
single-
support
a 3
cards.
little
fiscal
years,
2.6%
reduction
Section,
requirements
USPS-30B),
no revenue
to Notice
card
In
Postal
With
the high
increase
the
context
Service
for
would
be inconsequential.
Test
13
$29
reduction,
of Inquiry
that
Year
volumes,
of
the
the
last
excessive.
at
Initial
USPS projection
are
own
generating
No. 5, and its
the
million,
most
rate
demonstrate
the
could
loss.
by the
in revenues,
for
1.3%.
in card rates
in
in the card rate
of at
of about
a 2 cent
for
an increase
reduction
of revenue
reported
Cards revenue
USPS-30A) and the After-Rates
A one cent
reduction
or
Total
(Exh.
a reduction
profits
First
less
analyses
(Exh.
$1,088,979,000
The OCA Response
Brief,
contribution
(MMA-T-1)
Before-Rate-increase
to a revenue
in
unit
small
cost
and their
in a maximum loss
resulting
a
Bentley
$29,136,000.
elasticity,
three
Richard
$1,059,843,000
of only
would
makes a
cent
14.5
REVENUE IMPACTS OF CARD RATE REDUCTIONS
WILL BE MINIMAL
revenue
revenue
a
representing
cents,
("discount")
The projected
1998
far
which
mail,
differential
cents;
would make a unit
As a "transition",
have analyzed
and presorted
Fiscal
6.76
imposes
15
3 cents,
- VI.
most
card
set
card rate
make a similar
card.
(ABA/EEI/NAPM-T-l)
piece
of
costs
a presorted
could
single-piece
would
the single-piece
rate
cent
cent
18
Of
The
Commission
has significant
be made to bring
projected
The reductions
impacts
in card
and
discretion
discretion
are
revenues
rates
clearly
into
line
requested
within
to make adjustments
across-the-board
as to what adjustments
the
in
projected
by APPA would
scope
in rates.
reductions
with
all
of
costs.
have minimal
the
Benefits
card
are to
Commission's
to the public
rates
would
be
of
very
substantial.
VII.
PRESENT AUTOMATION CONDITIONS ARE BURDENSOME
The standard
card
used
rendered
has an address
complete
11
rate
(See
and other
their
cards
to
for
processing
send
to
at
and to walk sequences,
are irrelevant.
for
the
6 digits
last
alternative,
the
originating
five
5-digit
of
possibly
sorted
barcodes
a 4.25"
in
piece
with
card rate
the long
the
address.
should
centers
the
of
that
destination
to carriers
offices
code
should
rates
with
be
only
(Tr.
20/10263)
An
also
be explored.
SUMMARY
Card Rate - APPA's recommended 18
would be 54.5% of a 33 cent
standing
rounds
of the automation
automation
x 7" card,
VIII.
A. Single-Piece
digits
for
to qualify
equipment
to destination
and carrier
cards
first
sectional
by automation
the first
of
to 3 or 5-digits
the
At
the
automation
been able
through
services
contain
for
Many users
destinations.
sorted
to
eligibility
have not
go
for
narrow
Cards presorted
Cards presorted
eligible
too
for
rates.
5-digit
is
is
purposes
do not
3 and
where mail
that
customers
20/10268)
business
automation
centers,
Tr.
routes,
billing
required
automation
carrier
mail
stub
barcode
categories.
billing
or
digit
for
letter/card
historical
14
letter
Cent
rate,
relationship.
Single-
consistent
Such
a rate
relationship
statutory
would
standards,
privacy;
cards
8.5% of the weight
price
elasticity
Cards
have only
have
and cards
the
absolute
a fraction
Cards on average
of a letter,
of
have only
have 4
Presort
-0.944
times
the
with
the rate
Ratio
400
Rate - APPA's recommended rate
making
criteria
%
of
15
than
cents
is
the USPS
19 cents:
Comparison
of Mark-Ups
of Cards
At USPS Proposed and APPA Recommended Rates
APPA
USPS
Criteria
Sinale-niece
Rate
Unit cost
Unit contribution
A Basic
unit
costs
card
rate
a
(7.7568
would
cents)
of
7.2
15
of
almost
Basic
cents,
System
than
cents
Presort
100%.
card
slightly
the single-piece
An
18
to
system
rate
higher
a presorted
15
15
7.757
7.243
would have a mark-up
contribution
even though
contribution,
on the
of
make a unit
cent
15
rate
18
11.243
6.757
19
7.757
11.243
9.757
Presort
Sincle-piece
Presort
21
11.243
Presort
contribution
burden
letters
of a letter.
-0.232
more consistent
unit
that
with
Comparison of Letters
and Cards
At APPA Recommended Rates
Letter
Card
Card/Letter
33 cents
18 cents
54.5%
Sealed
Open
Zero
8 pages
l/3
page
1 oz.
I/12
oz.
Z%5%
B. Basic
cents;
consistent
more
of letters:
Criteria
Rate
Privacy
Communication
Weight
Elasticity
proposed
privacy.
capacity
about
far
be far
considering
have zero
the communication
also
cent
would
single-piece
costs
of
make
a unit
than
the
card
imposes
card.
of total
6.8
single-piece
far
The present
less
two
cent
"discount"
provide
the rate
The Basic
C.
broad
for
basic
differential
"discount"
Automation
Eligibility
analysis
of
for
the
qualifying
problems
of
to envelope
use cards
-
use,
have experienced
would
It
consider
some modification
presorted-
to
destination
cards
11
ramifications
in
5-digits
3 or
presorted
be
digit
Although
is their
which
interest
5 digit
carrier
to qualify
for
barcode.
It
of an enlargement
might
and
in
automation
also
order
rate
their
the
to
postal
USPS would
for
cards
delivered
to
to
those
be useful
Respectfully
some card
allow
categories,
of permissible
Amerkan
that
conditions
routes,
postoffice,
perception
in
if
of the Automation
and
upon
have continued
increases
public
made any
conditions
have driven
those
significant
the
to 3 cents.
of automation
it
to
standards.
APPA has not
automation
and many of
and fails
by the statutory
purposes,
for
is punitive
be increased
impact
billing
costs.
the full
should
the
the use of cards
cards
required
Presort
scale
users
presorted
cards
a
without
to consider
the
to 7 inches.
submitted,
Public
Power Association
ene E. Threadgiu
Chain Bridge Rd. Ste.200
22101
McLean, Virginia,
1493
(703)
(703)
734-1318
734-1943
CERTIFICATE OF SERVICE
counsel for the American Public Power
I, Eugene E. Threadgill,
Association,
hereby certify
that,
on April
1, 1998,
copies of the
foregoing
document have been served upon the USPS, the OCA, and
upon all interveners
in accordance
with the Rules of Pract,ice.
16