Alliance Alert 2/17/26 — Alliance Petitions PRC for Changes to Rate System

The Alliance of Nonprofit Mailers has petitioned the Postal Regulatory Commission (PRC) for changes to the USPS rate system, in response to the PRC’s invitation to stakeholders to do so.

The Alliance petitioned the PRC to return the rate system to the CPI-cap that was in effect for nearly 14 years before the PRC implemented the modified rate system in 2021 giving the USPS additional rate authority above CPI for the past 5 years.  As part of its petition, the Alliance asked the PRC to eliminate the existing Density additional rate authority and non-compensatory rate authority as well as re-instituting the CPI cap.

It noted that there are areas of consensus between the PRC, the USPS and industry — “all agree that the current system is not achieving the statutory objectives and factors.”  “We all also recognize that, whatever the outcome of this rulemaking, it will not be enough to ensure the Postal Service’s financial stability on its own,” the Alliance said, “[t]here is likely no modified or alternative system that is within the Commission’s power to promulgate that, by itself, will preserve the Postal Service’s future…Congress must help.”

The Alliance told the PRC that “restoring the initial CPI cap system will best balance the competing objectives and factors.”  It noted that during the CPI-only era (December 2006-January 2021), the USPS “was better able to control its costs, it was more efficient, its service performance was overall better, and it was no worse off financially.”  “We believe the CPI cap system would have returned even better results,” the Alliance said, “were it not for the extraordinary events that occurred during that time period (e.g., the Great Recession, the pandemic) as well as the PAEA requirement that the USPS pre-fund its retiree health benefits system during this same period.”   “Returning to the system that Congress originally mandated will not cause the Postal Service’s demise,” it stressed, “and it will preserve the Commission’s regulatory power and dramatically help market-dominant mailers who have been getting crushed beneath the weight of excessive rate increases that have hastened volume loss over the past five years.”

The Alliance reminded the PRC of the size and importance of the nonprofit industry, as well as its value to the U.S. economy, and to the USPS.  It stressed to the PRC that the rate system in effect the past 5 years has accelerated the decline of Nonprofit mail volume at a rate more than double annually what was seen in the 15 years prior (which included the Great Recession and the pandemic).  The Alliance recapped letters from nonprofit organizations that have been filed at the PRC as part of this overall proceeding, detailing the negative impact the magnitude of rate increases has had on their organizations, leading to volume declines and, in some cases, movement from print to digital alternatives.

The Alliance stressed to the PRC that the rate system must balance as much as possible the statutory objectives implemented as part of the Postal Accountability and Enhancement Act (PAEA) in 2006, not give superior weight to one objective, such as the stability of the USPS finances.   It urged the PRC to return to the CPI cap to help strengthen the incentive for the USPS to more aggressively reduce its costs and grow its revenue.

The purpose of the rate system alone is not to ensure USPS’ financial sustainability, the Alliance reminded the PRC.  That will take a “whole-of-government” effort of which the rate system is just one part.  Legislative changes also are needed, as is USPS “self-help” initiatives to reduce costs and grow revenue.

A full copy of the Alliance’s petition is available on the PRC website.  Highlights from petitions filed by others will appear in the next edition of the Alliance Report.