Proposed Rule2025-00153
Periodic Reporting
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 21, 2025
Issuing agencies
Postal Regulatory Commission
Abstract
The Commission is acknowledging a recent Postal Service filing requesting the Commission initiate a rulemaking proceeding to consider changes to analytical principles relating to periodic reports. This document informs the public of the filing, invites public comment, and takes other administrative steps.
Full Text
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<title>Federal Register, Volume 90 Issue 12 (Tuesday, January 21, 2025)</title>
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[Federal Register Volume 90, Number 12 (Tuesday, January 21, 2025)]
[Proposed Rules]
[Pages 6927-6928]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-00153]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3050
[Docket No. RM2025-6; Order No. 8459]
Periodic Reporting
AGENCY: Postal Regulatory Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Commission is acknowledging a recent Postal Service filing
requesting the Commission initiate a rulemaking proceeding to consider
changes to analytical principles relating to periodic reports. This
document informs the public of the filing, invites public comment, and
takes other administrative steps.
DATES: Comments are due: February 27, 2025.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at <a href="http://www.prc.gov">http://www.prc.gov</a>. 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: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Proposal
III. Notice and Comment
IV. Information Request
V. Ordering Paragraphs
I. Introduction
On December 19, 2024, the Postal Service filed a petition pursuant
to 39 CFR 3050.11 requesting that the Commission initiate a rulemaking
proceeding to consider changes to analytical principles relating to
periodic reports.\1\ The Petition presents an updated facility rental
analysis used to distribute space provision costs to individual
products in the Annual Compliance Report. Petition at 1.
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\1\ Petition of the United States Postal Service to Initiate a
Proceeding to Change Analytical Principles and Notice of Filing Non-
Public Materials, December 19, 2024 (Petition). The proposed change
is attached to the Petition (Proposal).
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II. Proposal
Background. The Postal Service explains that the recent facility
rental analysis, which was completed in 1992, was based on Facility
Management System (FMS) data. Id. Proposal at 1 (citing Docket No. R94-
1, USPS LR-G-120, Section IV.). This analysis relied on a sampling
approach to estimate rental values for 18 facility groupings over a
study period of November 30, 1981, to November 30, 1991. Petition,
Proposal at 2. The Postal Service notes that the adjusted results from
this analysis were last used to distribute space provision costs in
Docket No. ACR2023, Library Reference USPS-FY23-8. Id. at 1. The Postal
Service explains that there are two analyses in the facility portion of
Library Reference USPS-FY23-8. Id.
The first consists of the results from an updated Facility Space
Usage Study (FSUS), which was approved by the Commission via Proposal
Nine in August 2020.\2\ The results from that analysis are used to
distribute both space support and space provision costs. Petition,
Proposal at 2.
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\2\ Id. at 1-2 (citing Docket No. RM2020-1, Order on Analytical
Principles Used in Periodic Reporting (Proposal Nine), August 17,
2020 (Order No. 5637)).
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The second analysis concerns rental costs and was listed as a near-
term study in response to the Commission's request for possible data
improvements.\3\ The results from this analysis are used to distribute
the space provision costs only. Petition, Proposal at 2. The Postal
Service identifies the affected cost segments in Table 1. Id.
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\3\ Id. (citing Docket No. RM2022-1, Notice and Order of
Proposed Rulemaking on Periodic Reporting, October 8, 2021 (Order
No. 6004); Docket No. RM2022-1, Initial Comments of the United
States Postal Service, March 25, 2022, at 10).
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The Postal Service identifies three key limitations of the 1992
rental value analysis. Id. at 4-5. First, the Postal Service observes
the apparent absence of a definitive source for nationwide cap rates,
which are used to evaluate real estate investments that can be
calculated by dividing the net income from a property (i.e., rent) by
its current market value. Id. at 4. Second, the Postal Service notes
that the FMS ``building cost'' (construction costs for the facility at
the time the facility was built or the acquisition costs at the time
the facility was acquired) and ``land cost'' (purchase price for the
land at the time the property was acquired) fields contain cost data
that were incurred at different points in time. Id. at 4-5. Third, the
Postal Service explains that the definition of ``new'' buildings
covered a 10-year period (over which fair market value can change
significantly) and that ``new owned'' data were used to impute rental
values for ``old owned'' facilities and were applied to all ``old''
properties even though some facilities were decades older than other
facilities. Id. at 5.
Proposal. Based on the discussion above, the Postal Service states
that it proposes a simplified and more representative analysis in which
the rental cost distribution by operation and function is estimated
using Fiscal Year (FY) 2019 eFMS rental cost data for all active
facilities included in Proposal Nine. Id. This proposal does not use
sampling methods. Id. The Postal Service describes the proposed data
sources, organization of the inputs and outputs, methodology, and
modifications to the facility file appearing in Library Reference USPS-
FY23-8. Id. at 6-10.
Impact. The Postal Service asserts that using postal data rather
than sampling would mean that ``subjective inputs, such as
capitalization rates and rent change factors, are no longer needed.''
Id. at 1. The Postal Service contends that its proposal would ``more
accurately represent[ ] market value rental rates for each operation
and function.'' Id. at 10. The Postal Service states that the
``previous methodology may have overstated the market value rental
rates for plants . . . .'' Id. The Postal Service presents Table 2,
which summarizes the 2019 rental cost distribution by operation and
function (component) that would be generated by adopting the proposal.
Id. at 10, 12. The Postal Service presents Table 3, which summarizes
the impact that applying this proposal would have had on the overall
(i.e., across all cost segments) volume-variable and product-specific
costs for each product in FY 2023.\4\ Under the proposal, the Postal
Service estimates that attributable costs for Market Dominant products
and Competitive products would decrease
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2.12 percent and 1.53 percent, respectively. Id.
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\4\ Id. at 10, 13. The Postal Service states that a more
comprehensive version of Table 3, which includes disaggregated rows
for individual Competitive Products, is provided under seal. Id. at
11.
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III. Notice and Comment
The Commission establishes Docket No. RM2025-6 for consideration of
matters raised by the Petition. More information on the Petition may be
accessed via the Commission's website at <a href="https://www.prc.gov">https://www.prc.gov</a>.
Interested persons may submit comments on the Petition and the proposal
by February 27, 2025. Pursuant to 39 U.S.C. 505, Almaroof Agoro is
designated as an officer of the Commission (Public Representative) to
represent the interests of the general public in this proceeding.
IV. Information Request
On December 23, 2024, Pitney Bowes filed a motion seeking issuance
of an information request to the Postal Service.\5\ Because the
response to the proposed question is likely to aid evaluation of the
Petition, the Motion is granted. The Postal Service shall respond to
the following question by January 7, 2025: Please provide modified
versions of Library Reference USPS-FY23-24: FY 2023 Non-Operation
Specific Piggyback Factors (Public Portion) and Library Reference USPS-
FY23-25: FY 2023 Mail Processing Piggyback Factors (Operation Specific)
that incorporate the impact of the proposed changes to analytical
principles.
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\5\ Motion of Pitney Bowes Inc. for Issuance of Information
Request, December 23, 2024 (Motion).
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V. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. RM2025-6 for consideration
of the matters raised by the Petition of the United States Postal
Service to Initiate a Proceeding to Change Analytical Principles and
Notice of Filing Non-Public Materials, filed December 19, 2024.
2. Comments by interested persons in this proceeding are due
February 27, 2025.
3. The Motion of Pitney Bowes Inc. for Issuance of Information
Request, filed December 23, 2024, is granted.
4. The Postal Service shall respond to the following question by
January 7, 2025, and provide modified versions of Library Reference
USPS-FY23-24: FY 2023 Non-Operation Specific Piggyback Factors (Public
Portion) and Library Reference USPS-FY23-25: FY 2023 Mail Processing
Piggyback Factors (Operation Specific) that incorporate the impact of
the proposed changes to analytical principles.
5. Pursuant to 39 U.S.C. 505, the Commission appoints Almaroof
Agoro to serve as an officer of the Commission (Public Representative)
to represent the interests of the general public in this docket.
6. The Secretary shall arrange for the publication of this order in
the Federal Register.
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2025-00153 Filed 1-17-25; 8:45 am]
BILLING CODE 7710-FW-P
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