[Federal Register Volume 78, Number 165 (Monday, August 26, 2013)]
[Notices]
[Pages 52806-52807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-20734]
=======================================================================
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
[Docket No. RM2013-6; Order No. 1814]
Periodic Reporting (Proposals One Through Five)
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Commission is noticing a recent Postal Service filing
requesting an informal proceeding to consider changes in four
analytical method changes for use in periodic reporting. This notice
informs the public of the filing, invites public comment, and takes
other administrative steps.
DATES: Comments are due: September 9, 2013. Reply comments are due:
September 19, 2013.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at http://www.prc.gov. Those who cannot submit comments
electronically should contact the person identified in the FOR FURTHER
INFORMATION CONTACT section by telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
at 202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Proposals
III. Notice and Comment
IV. Ordering Paragraphs
I. Introduction
On August 16, 2013, the Postal Service filed a petition pursuant to
39 CFR 3050.11 requesting that the Commission initiate an informal
rulemaking proceeding to consider changes in four analytical methods
for use in periodic reporting.\1\ The Petition labels the proposed
analytical method changes filed in this docket as Proposals One through
Four. In addition, the Petition requests clarification concerning the
status of a proposal that the Postal Service filed in response to a
Commission directive in Docket No. ACR2012 regarding distribution of
settlement costs within certain Global Plus Negotiated Service
Agreement (NSA) products.\2\ This request for clarification will be
treated as a petition pursuant to 39 CFR 3050.11 requesting that the
Commission initiate an informal rulemaking proceeding to consider the
changes identified in response to the Commission directive in Docket
No. ACR2012, Item 3. Id. This request will be labeled as Proposal Five
and reviewed as part of this docket.
---------------------------------------------------------------------------
\1\ Petition of the United States Postal Service for the
Initiation of a Proceeding to Consider Proposed Changes in
Analytical Principles (Proposals One through Four), August 16, 2013
(Petition).
\2\ Id. at 1; see also Docket No. ACR2012, Responses of the
United States Postal Service to Commission Requests for Additional
Information in FY 2012 Annual Compliance Determination, Item 3, June
26, 2013 (Proposal Five).
---------------------------------------------------------------------------
II. Proposals
A. Proposal One: New Formula and Location for Alaska Air Adjustment
Factor
The Postal Service proposes a simpler method for calculating the
Alaska Air Adjustment Factor. In addition, the Postal Service proposes
to implement the Alaska Air Adjustment Factor within the Cost Segment
14 model, rather than with the Cost and Revenue Analysis (CRA) model.
It asserts that the current method for calculating the Alaska Air
Adjustment Factor is unnecessarily complex, and since the current
method was established, postal operational data have improved
significantly. Thus, it contends, that the proposal is a more accurate
and more easily updateable ratio of highway to air costs. It also
believes that implementing the proposed change in the Cost Segment 14
workbook, rather than in the CRA model where it is currently located,
would help increase transparency. See Petition at 2-3.
B. Proposal Two: New Set of Distribution Factors for Alaska Non-
Preferential, Alaska Preferential, Hawaii, and Air Taxi Cost Pools in
Cost Segment 14
The Postal Service proposes a single set of distribution factors to
assign relevant costs from the Non-Preferential
[[Page 52807]]
Alaska Air, Preferential Alaska Air, Hawaii Air, and Air Taxi cost
pools to products. The proposed distribution factors rely on current
operations data from Surface Air Management Systems--Alaska regularly
collected by the Transportation Cost System. The proposal is also
designed to remedy an inaccuracy in the distribution of Air Taxi costs.
The Postal Service asserts that the primary advantage of the proposal
over the existing method is that it uses current data, and therefore
computes distribution factors that align with current product lists.
See id. at 4-7.
C. Proposal Three: New Set of Distribution Factors for Highway and
Plant Load Cost Pools in Cost Segment 14
The Postal Service proposes a proxy set of distribution factors to
assign relevant costs to products from the Highway Plant Load and Rail
Plant Load cost pools in Cost Segment 14. The Postal Service asserts
that the product lists have undergone significant changes since Docket
No. R2005-1 and the corresponding attributable costs have decreased
dramatically. It believes that rather than replicating expensive
special studies, it is more sensible to use its proposed proxy set of
distribution factors that can be updated quarterly to assign relevant
costs to products. See id. at 8-10.
D. Proposal Four: Change in Canada Air Transportation Costing
Methodology
The Postal Service proposes revising its costing methodology for
Air Transportation of outbound products to Canada. This is expected to
impact primarily Canada's Air Transportation costs and measured
contribution in both the ``Booked Version'' and ``Imputed Version'' of
reports. Specifically, the proposal benchmarks changes to ``Imputed
Reports.xls'' and ``Reports (Booked).xls'' to bring the reported
International Transportation costs by Product and Country into
agreement between the two versions. The proposed changes will preserve
the calculation of diversion of Outbound Canada Air Mail to Highway
Transportation and eliminate the shift in costs between Canada and the
rest of the world during the ``Booking'' process. In essence, the
Postal Service is proposing to change the Imputed Reports so that
Canada's combined Air and Air Diverted to Highway costs, together with
Air Transportation costs for the rest of the word, are benchmarked to a
combination of General Ledger Air and Surface Purchased Transportation
Accounts. Such results would then be used by ``Reports (Booked).xls''
without further change. The Postal Service asserts that Canada's
International Transportation costs for Outbound Air Mail that is
diverted to Highway Transportation, once obscured by International
Surface Transportation costs associated with Outbound Surface Mail,
have become discernible with the elimination of Outbound Surface Mail
Products. Thus, the proposal intends to make use of this information to
enhance the International CRA. See id. at 11-22.
E. Proposal Five: Change in Methodology for Distributing Settlement
Costs for Certain Negotiated Service Agreements
In its Annual Compliance Determination (ACD), the Commission
directed the Postal Service to more accurately develop costs or
increase the contingency factor to accommodate costs that cannot be
modeled for its Global Plus NSA products. See 2012 ACD at 169-70. The
Postal Service filed its response to the Commission's directive on June
26, 2013. See Proposal Five at 8-14. It notes that the Global Plus NSAs
at issue relate to mailpieces going to Canada, and, pursuant to
agreement, the Canada Post Corporation (CPC) bills the Postal Service
for services rendered relating to the total product. Accordingly, the
Postal Service asserts that it needs an improved methodology for
distributing settlement costs to each NSA contract within a particular
product. In its FY 2012 Annual Compliance Report, the Postal Service
used a pound distribution key to distribute costs to each NSA within a
product. In its response to the ACD directive, the Postal Service
proposes changing the pound distribution key methodology for
distributing settlement costs to a revenue distribution key methodology
in order to distribute costs to each NSA within a product.
The Postal Service observes that the overall product revenues
exceed the overall attributable costs and that each Global Plus NSA
within the 2B and 2C products should cover costs. However, it also
notes that the CPC settlement rates are more complex than a uniform
pound rate. For this reason, the Postal Service asserts that a revenue
key is better suited for distributing settlement costs to NSA contracts
in the Global Plus 2B and 2C products. Accordingly, the Commission will
consider the Postal Service's proposed change from a pound distribution
key methodology for distributing settlement costs within certain Global
Plus NSA products to a revenue distribution key methodology for
distributing settlement costs as Proposal Five in this docket.
III. Notice and Comment
The Commission establishes Docket No. RM2013-6 for consideration of
matters raised by the Petition and Proposal Five. More information on
the Petition and Proposal Five may be accessed via the Commission's Web
site at http://www.prc.gov. The Postal Service filed portions of its
supporting documentation under seal as part of a non-public annex.
Information concerning access to these non-public materials is located
in 39 CFR part 3007.
Interested persons may submit comments on the Petition and Proposal
Five no later than September 9, 2013. Reply comments are due no later
than September 19, 2013. Pursuant to 39 U.S.C. 505, Kenneth E.
Richardson is designated as officer of the Commission (Public
Representative) to represent the interests of the general public in
this proceeding.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. RM2013-6 for consideration
of the matters raised by the Petition of the United States Postal
Service for the Initiation of a Proceeding to Consider Proposed Changes
in Analytical Principles (Proposals One through Four), filed August 16,
2013.
2. The Commission will also consider in this docket matters raised
by the United States Postal Service in its Responses of the United
States Postal Service to Commission Requests for Additional Information
in FY 2012 Annual Compliance Determination, Item 3, filed June 26, 2013
(Proposal Five), in this docket.
3. Comments by interested persons in this proceeding are due no
later than September 9, 2013. Reply comments are due no later than
September 19, 2013.
4. Pursuant to 39 U.S.C. 505, the Commission appoints Kenneth E
Richardson to serve as an officer of the Commission (Public
Representative) to represent the interests of the general public in
this docket.
5. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2013-20734 Filed 8-23-13; 8:45 am]
BILLING CODE 7710-FW-P