The Postal Regulatory Commission has determined that the postal rate hike for Periodicals proposed last month—the first mandated to be tied to the Consumer Price Index—does not violate the new postal law and will go into effect on May 12.

Periodicals rates will increase on average about 2.72 percent according to the Postal Service, though David Straus, ABM Washington Counsel, estimates an increase of nearly 2.9 percent for almost all Periodicals, the difference being that a limited number of out-of-county pieces and in-county qualified publications now receive a discount.

According to the postal service, “Interested persons were given the opportunity to comment on the notice adjustment. Most of the comments focus on planned increases for specific rate categories or products. None claims that the planned increase for any class violates the price cap.”

Under the Postal Accountability and Enhancement Act, the Postal Service may “bank” the difference between the CPI cap and the implemented price changes, which means that the .18 percent difference between the rate hike and the 2.9 percent CPI can be added to the CPI for rate hikes within the next five years.  

Also under the new law, the Postal Service has extensive flexibility to vary rates within classes as long as the class average is CPI-limited. However, Straus says that the increases within the Periodicals class this time, at least, are very nearly across the board, with extremely small variations among different publications.