i
BEFORE THE
/
POSTAL RATE COMMISSION
20268-0001
WASHINGTON, D.C.
Special
Services
Fees and Classifications
RECEIVED
hv
Docket
6
2
16
Pti '96 J! f'
POSTit RbTr CCW~~!S~ICt4
OFFICE Oi lliC SiCitETAf~Y
No.
MC96-3
REVISED ANSWEROF THE OFFICE OF THE CONSUMERADVOCATE
TO INTERROGATORYUSPS/OCA-T400-21
OF THE UNITED STATES POSTAL SERVICE
REDIRECTED TO WITNESS THOMPSON
(NOVEMBER6, 1996)
The Office
of the Consumer Advocate
hereby
answer of Pamela A. Thompson to interrogatory
initially
filed
Collins.
Please
been rewritten.
submits
USPS/OCA-T400-21,
on November 4, 1996, redirected
note
that
The revised
the final
response
the revised
paragraph
from witness
of the response
is attached.
Respectfully
submitted.,
$wf-Nidb
GaAw
EMMETTRAND COSTICH
Assistant
Director
Office of the Consumer Advocate
has
ANSWEROF OCA WITNESS PAMELA A. THCUPSON
TO REDIRECTED INTERROGATORYUSPS/OCA-T400-21
USPS/OCA-T400-21.
On page 3, lines
8 and 9 of your testimony
you state "I oppose this attempt
to raise revenues outside
an
omnibus rate case".
Is it your testimony
that rates and revenue can never be
a.
increased
except in an omnibus rate case?
If your answer to
(a) is affirmative,
please identify
all legal authority
of
which you are aware that supports
your conclusion.
b.
If your answer to (a) is negative,
please explain
the
circumstances
under which you feel rates and revenues can be
increased
and how you reached this conclusion.
A.
a.
No.
b.
I am not
situations
in which
However,
<--..
in a position
the
selective
decision
must be rational.
to generate
of mail
revenue,
The predecisional
inequitable,
particular
increase,
revenue
--
category
-
burden,
designed
purpose
of a rate
rate
increase
is
to generate
categories
new net
in which
revenue
a selective
can be demonstrated
has caused
a new revenue
attributable
costs),
solely
case
case is
of certain
a situation
below
rate
and discriminatory.
When it
of mail
fall
a general
designed
be rational.
when rates
(e.g.,
rate
would
are justifiable.
an omnibus
arbitrary,
possible
outside
exclusion
increase
I can hypothesize
increase
rates
then
all
increases
When the primary
from a rate
is unfair,
rate
to raise
new net
appropriate.
to catalog
to recover
may be appropriate.
that
it
a
burden
then
a targeted
the new demonstrated
However,
rate
should
be
ANSWEROF OCA WITNESS PAMELA A. THOMPSON
TO REDIRECTED INTERROGATORYUSPS/m-T400-21
,.-
CONTINUATION OF ANSWER TO USPS/OCA-T400-21:
possible
to make even this
any given
cost
year
coverage
recent
there
is
too high
designed
necessary
rate
revenue
to be categories
relative
neutral.
of mail
to the Commission's
Such categories
to neutralize
could
the net
whose
most
receive
revenue
In
rate
effect
of any
increases.
The following
projected
of case net
are likely
recommendation.
reductions
type
discussion
FY 95 (i.e.,
refers
to OCA-LR-6,
R94-1 TYAR) cost
and services
was 156.8
BY 95) total
mail
coverage
The actual
percent.
page 4.
for
The
total
FY 95 (i.e.,
mail
MC96-3,
<-,.
Comparing
individual
indicates
that
and services
cost
coverage
projected
cost
coverages
some coverages
the Commission's
Docket
consider
all
points.
The following
Commission
Special
cost
variances
cost
recommendations
Certified
by 26.5,
19.1,
Stamped Envelopes
coverages
greater
exceed
by more than
by 31.2,
27.9,
while
with
actuals
others
Priority
Bound Printed
by 12.2,
than
are below,
For example,
No. R94-1 recommendations.
coverage
Rate Fourth
are above,
was 157 percent.
10 percentage
Docket
No. R94-1
10 percentage
by 28.3,
Matter
and Registry
points:
Money Orders
by 25.6,
by 11.8.
by
Cards by
ANSWEROF OCA WITNESS PAMELA A. THOMPSON
TO REDIRECTED INTERROGATORYUSPS/OCA-T400-21
CONTINUATION OF ANSWER TO USPS/OCA-T400-21:
Bringing
Docket
rate
these
cost
coverages
"in
line"
No. R94-1 recommendations
decrease.
Commission's
The following
Docket
percentage
points:
Classroom
by 24.6,
Rate by 17.0,
Service
special
service
"out
of line"
with
cost
coverages,
the Postal
Certified.
proposes
10
Second-Class
Fourth-Class
Library
and P.O. Box/Caller
coverages
classification
Conceivably,
neutral.
Several
the Commission's
and rates
Service
by 44.5,
by 17.5,
cost
the
by more than
COD by 13.9,
these
offerings.
could
For example:
Insurance,
are below
"in
No. R94-1 recommendations
Service
line."
each to have a
line"
could
with
require
increase.
revenue
Delivery,
by 14.7,
Docket
have been net
more "in
require
coverages
Third
Delivery
Bringing
each to have a rate
The Postal
Piece
Special
Insurance
the Commission's
cost
the Commission's
No. R94-1 recommendations
Single
by 10.3.
could
with
Docket
special
Docket
Money Orders,
Money Orders
for
select
No. MC96-3 could
service
No. 94-l
have been adjusted.to
COD and P.O. Box/Caller
ignored
reform
rates
are
recommended
bring
them
Registry,
Special
service.
However,
and COD and targeted
Revised
11/6/96
ANSWEROF 0% WITNESS PAMELA A. THOMPSON
TO REDIRECTED INTERROGATORYUSPS/OCA-T400-21
CONTINUATION OF ANSWER TO USPS/OCA-T400-21:
In R94-1,
services
for
million.
revenues
total
attributable
FY 95 were $1,366.7
-See Appendix
attributable
__._
projected
costs
special
were $1,563.8
M 95 were thus
$6.2
million
less
actual
were $21.1
million
Clearly,
service
if
actual
special
service
rates
back "in
in net
revenues
would
be needed.
line"
were $1,542.8
total
Fy 95
million;
Base Year
attributable
than
(FY
costs
R94-1 projections,
in excess
the purpose
special
were $1,360.5
PRC-LR-2,
million.
Special
projections.
Actual
services
and USPS-T-5C.
revenues
1.
for
revenues
million;
G, Schedule
for
costs
of the
1995),
for
while
Commission's
of MC96-3 were to bring
with
R94-1,
then
no increase
DECLARATION
I,
Pamela A. Thompson, declare
the answers
United
States
knowledge,
Executed
,;r-.
--
to redirected
Postal
information
interrogatory
Service
is true
and belief.
under penalty
of perjury
USPS/OCA-T400-21
and correct,
that
of the
to the best
of my
CERTIFICATE OF SERVICE
I hereby
certify
document upon all
accordance
with
that
I have this
participants
section
3.B(3)
of record
date
served
in this
of the special
proceeding
rules
(&LwGvhti
EMMETTRAND COSTICH
Attorney
Washington,
DC 20268-0001
November 6, 1996
the foregoing
in
of practice.