Even though the U.S. Postal Service has generated $143 million in net income to date in fiscal 2005, CFO Richard Strasser defended its request for a $3.1 billion rate case to cover retiree expenses and warned of further such action in the future.

Last month the Board of Governors asked management to begin work on a rate case filing with the Postal Rate Commission. In a press conference in mid-February, Strasser said the USPS needs the money for fiscal 2006 and that, under current law, it may have to request another $3.2 or $3.3 billion rate hike for 2007.

Strasser did not say when the current filing would be made, though industry observers generally expect it to occur no later than April.

The $3.1 billion covers payments into retirement funds of former postal employees that only a few years ago the USPS was able to pass on to the U.S. Treasury Department, averting a postage rate increase until 2006. Largely because postal reform legislation did not pass last year, the USPS once again became saddled with the obligation.

Last month, mailer groups seemed more upset with Congress than the postal service for the rate-hike request.

Despite the fact that the U.S. Postal Service has generated net income of $143 million to date in its in fiscal 2005, CFO Richard Strasser defended the USPS’s request for a $3.1 billion rate case to cover retiree expenses and warned of a further such filing the following year.

Last week, the USPS Board of Governors asked postal management to begin work on a new rate case filing with the Postal Rate Commission to cover an escrow requirement of $3.1 billion.

In a press conference yesterday, Strasser reiterated that the USPS needs this $3.1 billion for fiscal year 2006. Under current law, he said the USPS might have to file another rate case for $3.2 or $3.3 billion for 2007, he said.

Strasser did not say when this nor the overall rate cases would be filed with the Postal Rate Commission, though industry observers generally expect the USPS to file the overall case no later than April.

The $3.1 billion covers payments into retirement funds of former postal employees that only a few years ago the USPS was able to pass onto the U.S. Treasury Dept., averting a postage rate hike until 2006. Largely because postal reform legislation did not pass last year, the USPS once again became saddled with the obligation, (Direct Newsline, Feb. 18).