83 FR 27523 - Periodic Reporting
POSTAL REGULATORY COMMISSION Federal Register Volume 83, Issue 114 (June 13, 2018)
Federal Register Volume 83, Issue 114 (June 13, 2018)
| Page Range | 27523-27524 | |
| FR Document | 2018-12646 |
[Federal Register Volume 83, Number 114 (Wednesday, June 13, 2018)] [Proposed Rules] [Pages 27523-27524] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-12646] ======================================================================= ----------------------------------------------------------------------- POSTAL REGULATORY COMMISSION 39 CFR Part 3050 [Docket No. RM2018-6; Order No. 4635] Periodic Reporting AGENCY: Postal Regulatory Commission. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: The Commission is noticing a recent filing requesting that the Commission initiate an informal rulemaking proceeding to consider changes to an analytical method for use in periodic reporting (Proposal Three). This document informs the public of the filing, invites public comment, and takes other administrative steps. DATES: Comments are due: June 29, 2018. 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: David A. Trissell, General Counsel, at 202-789-6820. SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction II. Proposal Three III. Notice and Comment IV. Ordering Paragraphs I. Introduction On June 1, 2018, 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 identifies the proposed analytical changes filed in this docket as Proposal Three. --------------------------------------------------------------------------- \1\ Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Three), June 1, 2018 (Petition). --------------------------------------------------------------------------- II. Proposal Three Background. The Commission adopted the use of incremental costs as the basis for class-level and product-level attributable costs in September of 2016.\2\ In FY 2017, the methodology was fully applied for the first time.\3\ Proposal Three seeks to revise two incremental costing procedures in accordance with this methodological change. --------------------------------------------------------------------------- \2\ Docket No. ACR2017, Annual Compliance Report, December 29, 2017, at 4-6. \3\ Docket No. ACR2017, Annual Compliance Determination, March 29, 2018, at 8. --------------------------------------------------------------------------- The first proposed revision concerns the Postal Service's method for calculating incremental costs for competitive products collectively. Under current analytical principles, the Postal Service calculates these costs using a so-called ``hybrid'' approach. The Postal Service first calculates the incremental costs of competitive domestic products (including group specific costs for these products) and then adds it to the volume variable and product specific costs of competitive international products. This ``hybrid'' approach blends an estimate of competitive domestic incremental costs with a proxy estimate of competitive international incremental costs. The second proposed revision relates to estimating inframarginal costs for products with insufficient data at the cost pool level. The Postal Service states that this revision primarily concerns negotiated service agreements (NSAs), because NSAs are classified as independent products, which can have low volumes. Petition, Proposal Three at 1. Furthermore, the Postal Service contends that NSAs create practical issues in calculating incremental costs, in part because the Postal Service's data systems do not distinguish between NSA and non-NSA mailpieces. Id. at 13. This prevents the Postal Service from creating the standard cost drivers for NSAs (e.g. volume, weight, cubic volume), which are necessary for calculating incremental costs. Id. Proposal. As discussed above, the Postal Service proposes two procedures to revise its calculation of incremental costs. Under procedure one, the Postal Service seeks to replace the ``hybrid'' approach to calculating aggregate incremental costs, which relies on a proxy for international costs, with a direct estimation of those costs. Id. at 4. Due to improvements suggested in the FY 2016 Annual Compliance Determination, in conjunction with corresponding analytical improvements, the Postal Service states that it can now directly estimate the actual incremental costs of international mail. Id. at 6. Under procedure two, the Postal Service proposes thresholds for calculating inframarginal costs and an alternative methodology for approximating the appropriate cost driver ratios for NSAs. Id. at 8. Specifically, the Postal Service suggests that it should not have to calculate the incremental costs if an NSA has less than 0.3 percent of the product type's (e.g. Priority Mail, Parcel Select) volume variable cost or less than $8 million in volume variable cost. Id. at 11. The Postal Service also seeks to use the ratio of NSA volume variable costs to product type volume variable costs as a proxy cost driver to calculate the incremental cost of NSA products. Id. at 12-20. Rationale and impact. The Postal Service contends that procedure one will allow it ``to rely upon the best available information'' because the [[Page 27524]] procedure replaces the hybrid approach's proxy incremental costs with actual estimation of the incremental costs of international products. Id. at 7. The Postal Service comments that ``[t]his alone constitute[s] a clear improvement over past practice.'' Id. at 6. Furthermore, the Postal Service notes that the change will allow ``the incremental cost model to directly estimate the costs of producing all competitive products simultaneously, and thus provide exactly the information needed to fully conduct the cross-subsidy test as intended.'' Id. at 7. The Postal Service estimates that the impact of procedure one would be to raise competitive product incremental costs by 0.2 percent. Id. at 7-8. The Postal Service estimates that amount to be approximately $25 million. Id. The Postal Service argues that procedure two's proposed thresholds are appropriate because its testing suggests that NSAs ``have no appreciable inframarginal costs'' below these thresholds. Id. at 11. The Postal Service argues that ``when a product has a very small volume relative to the other products handled in the activity or cost pool, the product's volume variable cost and incremental cost will virtually be the same.'' Id. at 9. For that reason, the Postal Service avers that ``the calculation of incremental costs for the hundreds of domestic NSA's with minimal volumes would require a material amount of scarce Postal Service resources, and the resulting incremental cost estimates for those products would not be practically different from their volume variable costs.'' Id. at 12. The Postal Service concludes that it and the Commission ``are better served when the Postal Service expends those resources on other, critical, costing issues.'' Id. With regard to procedure two's proposed cost driver change, the Postal Service states that it ``is not possible . . . to generate the required cost driver proportions for specific NSA products.'' Id. at 13. For this reason, the Postal Service proposes to use ``the volume variable cost ratio as a proxy for the unknown true variable, the ratio of the cost drivers.'' Id. at 17. In the Postal Service's view ``the approximation used for the missing driver ratios should reflect the characteristics of the missing information as well as possible.'' Id. at 13. The Postal Service states that the impacts associated with procedure two are ``less clear cut'' than procedure one because ``there is no intuitive baseline against which to compare [results].'' Id. at 20. The Postal Service explains that ``[i]n theory, the logical baseline would be actual inframarginal costs calculated using actual data at the cost pool level.'' Id. However, ``since the very reason we must rely on the approximation is because such actual data at that level do not exist, that theoretical baseline does not exist either.'' Id. III. Notice and Comment The Commission establishes Docket No. RM2018-6 for consideration of matters raised by the Petition. More information on the Petition may be accessed via the Commission's website at http://www.prc.gov. Interested persons may submit comments on the Petition and Proposal Three no later than June 29, 2018. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin is designated as an 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. RM2018-6 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 (Proposal Three), filed June 1, 2018. 2. Comments by interested persons in this proceeding are due no later than June 29, 2018. 3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. Clendenin to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket. 4. The Secretary shall arrange for publication of this order in the Federal Register. By the Commission. Stacy L. Ruble, Secretary. [FR Doc. 2018-12646 Filed 6-12-18; 8:45 am] BILLING CODE 7710-FW-P
![Federal Register / Vol. 83, No. 114 / Wednesday, June 13, 2018 / Proposed Rules 27523
of the APA or any other law to publish SUMMARY: The Commission is noticing a incremental costs of competitive
a general notice of proposed recent filing requesting that the domestic products (including group
rulemaking. Commission initiate an informal specific costs for these products) and
Additionally, this action is not a rulemaking proceeding to consider then adds it to the volume variable and
significant regulatory action as defined changes to an analytical method for use product specific costs of competitive
by Executive Order 12866 (Regulatory in periodic reporting (Proposal Three). international products. This ‘‘hybrid’’
Planning and Review), section 3(f), and, This document informs the public of the approach blends an estimate of
accordingly, this action has not been filing, invites public comment, and competitive domestic incremental costs
reviewed by the Office of Management takes other administrative steps. with a proxy estimate of competitive
and Budget. DATES: Comments are due: June 29, international incremental costs.
This action will not have substantial 2018. The second proposed revision relates
direct effects on the States, on the to estimating inframarginal costs for
relationship between the national ADDRESSES: Submit comments products with insufficient data at the
government and the States, or on the electronically via the Commission’s cost pool level. The Postal Service states
distribution of power and Filing Online system at http:// that this revision primarily concerns
responsibilities among the various www.prc.gov. Those who cannot submit negotiated service agreements (NSAs),
levels of government. Therefore, in comments electronically should contact because NSAs are classified as
accordance with Executive Order 13132 the person identified in the FOR FURTHER independent products, which can have
(Federalism) it is determined that this INFORMATION CONTACT section by low volumes. Petition, Proposal Three at
action does not have sufficient telephone for advice on filing 1. Furthermore, the Postal Service
federalism implications to warrant the alternatives. contends that NSAs create practical
preparation of a Federalism Assessment. FOR FURTHER INFORMATION CONTACT: issues in calculating incremental costs,
David A. Trissell, General Counsel, at in part because the Postal Service’s data
List of Subjects in 21 CFR Part 1308 systems do not distinguish between
202–789–6820.
Administrative practice and NSA and non-NSA mailpieces. Id. at 13.
SUPPLEMENTARY INFORMATION:
procedure, Drug traffic control, This prevents the Postal Service from
Reporting and recordkeeping Table of Contents creating the standard cost drivers for
requirements. I. Introduction NSAs (e.g. volume, weight, cubic
For the reasons set out above, the DEA II. Proposal Three volume), which are necessary for
proposes to amend 21 CFR part 1308 as III. Notice and Comment calculating incremental costs. Id.
follows: IV. Ordering Paragraphs Proposal. As discussed above, the
Postal Service proposes two procedures
PART 1308—SCHEDULES OF I. Introduction to revise its calculation of incremental
CONTROLLED SUBSTANCES On June 1, 2018, the Postal Service costs.
filed a petition pursuant to 39 CFR Under procedure one, the Postal
■ 1. The authority citation for part 1308 3050.11, requesting that the Service seeks to replace the ‘‘hybrid’’
continues to read as follows: Commission initiate a rulemaking approach to calculating aggregate
Authority: 21 U.S.C. 811, 812, 871(b), proceeding to consider changes to incremental costs, which relies on a
956(b), unless otherwise noted. analytical principles relating to periodic proxy for international costs, with a
■ 2. In § 1308.11, add paragraph (h)(36) reports.1 The Petition identifies the direct estimation of those costs. Id. at 4.
to read as follows: proposed analytical changes filed in this Due to improvements suggested in the
docket as Proposal Three. FY 2016 Annual Compliance
§ 1308.11 Schedule I. Determination, in conjunction with
* * * * * II. Proposal Three corresponding analytical improvements,
(h) * * * Background. The Commission the Postal Service states that it can now
(36) N-Ethylpentylone, its optical, adopted the use of incremental costs as directly estimate the actual incremental
positional, and geometric iso- the basis for class-level and product- costs of international mail. Id. at 6.
mers, salts and salts of isomers level attributable costs in September of Under procedure two, the Postal
(Other names: ephylone, N-1- 2016.2 In FY 2017, the methodology was Service proposes thresholds for
(1,3-benzodioxol-5-yl)-2- fully applied for the first time.3 Proposal calculating inframarginal costs and an
(ethylamino)-1-pentanone) .......... (7543) alternative methodology for
Three seeks to revise two incremental
* * * * * costing procedures in accordance with approximating the appropriate cost
Dated: June 6, 2018. this methodological change. driver ratios for NSAs. Id. at 8.
Robert W. Patterson, The first proposed revision concerns Specifically, the Postal Service suggests
the Postal Service’s method for that it should not have to calculate the
Acting Administrator.
calculating incremental costs for incremental costs if an NSA has less
[FR Doc. 2018–12669 Filed 6–12–18; 8:45 am]
competitive products collectively. than 0.3 percent of the product type’s
BILLING CODE 4410–09–P (e.g. Priority Mail, Parcel Select) volume
Under current analytical principles, the
Postal Service calculates these costs variable cost or less than $8 million in
using a so-called ‘‘hybrid’’ approach. volume variable cost. Id. at 11. The
POSTAL REGULATORY COMMISSION The Postal Service first calculates the Postal Service also seeks to use the ratio
amozie on DSK3GDR082PROD with PROPOSALS1
of NSA volume variable costs to product
39 CFR Part 3050 1 Petition of the United States Postal Service for type volume variable costs as a proxy
[Docket No. RM2018–6; Order No. 4635] the Initiation of a Proceeding to Consider Proposed cost driver to calculate the incremental
Changes in Analytical Principles (Proposal Three), cost of NSA products. Id. at 12–20.
Periodic Reporting June 1, 2018 (Petition).
2 Docket No. ACR2017, Annual Compliance
Rationale and impact. The Postal
AGENCY: Postal Regulatory Commission. Report, December 29, 2017, at 4–6. Service contends that procedure one
3 Docket No. ACR2017, Annual Compliance will allow it ‘‘to rely upon the best
ACTION: Notice of proposed rulemaking.
Determination, March 29, 2018, at 8. available information’’ because the
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![27524 Federal Register / Vol. 83, No. 114 / Wednesday, June 13, 2018 / Proposed Rules
procedure replaces the hybrid using actual data at the cost pool level.’’ ACTION:Advance notice of proposed
approach’s proxy incremental costs with Id. However, ‘‘since the very reason we rulemaking.
actual estimation of the incremental must rely on the approximation is
costs of international products. Id. at 7. because such actual data at that level do SUMMARY: EPA promulgates regulations
The Postal Service comments that not exist, that theoretical baseline does under authority provided in the federal
‘‘[t]his alone constitute[s] a clear not exist either.’’ Id. environmental statutes such as the
improvement over past practice.’’ Id. at Clean Air Act (CAA), Clean Water Act
6. Furthermore, the Postal Service notes III. Notice and Comment (CWA), Safe Drinking Water Act
that the change will allow ‘‘the The Commission establishes Docket (SDWA), and many others. Most
incremental cost model to directly No. RM2018–6 for consideration of statutory provisions require or allow
estimate the costs of producing all matters raised by the Petition. More some consideration of cost and benefits
competitive products simultaneously, information on the Petition may be when setting pollution standards, but
and thus provide exactly the accessed via the Commission’s website there is variation in terminology and
information needed to fully conduct the at http://www.prc.gov. Interested specificity provided in each law
cross-subsidy test as intended.’’ Id. at 7. persons may submit comments on the regarding the nature and scope of the
The Postal Service estimates that the Petition and Proposal Three no later cost and benefit considerations. In this
impact of procedure one would be to than June 29, 2018. Pursuant to 39 advance notice of proposed rulemaking
raise competitive product incremental U.S.C. 505, Katalin K. Clendenin is (ANPRM), EPA is soliciting comment on
costs by 0.2 percent. Id. at 7–8. The designated as an officer of the whether and how EPA should
Postal Service estimates that amount to Commission (Public Representative) to promulgate regulations that provide a
be approximately $25 million. Id. represent the interests of the general consistent and transparent
The Postal Service argues that public in this proceeding. interpretation relating to the
procedure two’s proposed thresholds consideration of weighing costs and
are appropriate because its testing IV. Ordering Paragraphs benefits in making regulatory decisions
suggests that NSAs ‘‘have no It is ordered: in a manner consistent with applicable
appreciable inframarginal costs’’ below 1. The Commission establishes Docket authorizing statutes. EPA is also
these thresholds. Id. at 11. The Postal No. RM2018–6 for consideration of the soliciting comment on whether and how
Service argues that ‘‘when a product has matters raised by the Petition of the these regulations, if promulgated, could
a very small volume relative to the other United States Postal Service for the also prescribe specific analytic
products handled in the activity or cost Initiation of a Proceeding to Consider approaches to quantifying the costs and
pool, the product’s volume variable cost Proposed Changes in Analytical benefits of EPA regulations. This
and incremental cost will virtually be Principles (Proposal Three), filed June 1, ANPRM does not propose any
the same.’’ Id. at 9. For that reason, the 2018. regulatory requirements.
Postal Service avers that ‘‘the 2. Comments by interested persons in DATES: Comments must be received on
calculation of incremental costs for the this proceeding are due no later than or before July 13, 2018.
hundreds of domestic NSA’s with June 29, 2018. ADDRESSES: Submit your comments,
minimal volumes would require a 3. Pursuant to 39 U.S.C. 505, the identified by Docket ID No. EPA–HQ–
material amount of scarce Postal Service Commission appoints Katalin K.
resources, and the resulting incremental OA–2018–0107 at http://
Clendenin to serve as an officer of the www.regulations.gov. Follow the online
cost estimates for those products would Commission (Public Representative) to
not be practically different from their instructions for submitting comments.
represent the interests of the general Once submitted, comments cannot be
volume variable costs.’’ Id. at 12. The public in this docket.
Postal Service concludes that it and the edited or removed from Regulations.gov.
4. The Secretary shall arrange for EPA may publish any comment received
Commission ‘‘are better served when the publication of this order in the Federal
Postal Service expends those resources to its public docket. Do not submit
Register. electronically any information you
on other, critical, costing issues.’’ Id.
With regard to procedure two’s By the Commission. consider to be Confidential Business
proposed cost driver change, the Postal Stacy L. Ruble, Information (CBI) or other information
Service states that it ‘‘is not possible Secretary. whose disclosure is restricted by statute.
. . . to generate the required cost driver [FR Doc. 2018–12646 Filed 6–12–18; 8:45 am]
Multimedia submissions (audio, video,
proportions for specific NSA products.’’ etc.) must be accompanied by a written
BILLING CODE 7710–FW–P
Id. at 13. For this reason, the Postal comment. The written comment is
Service proposes to use ‘‘the volume considered the official comment and
variable cost ratio as a proxy for the should include discussion of all points
ENVIRONMENTAL PROTECTION you wish to make. EPA will generally
unknown true variable, the ratio of the
AGENCY not consider comments or comment
cost drivers.’’ Id. at 17. In the Postal
Service’s view ‘‘the approximation used contents located outside of the primary
40 CFR Ch. I submission (i.e., on the web, cloud, or
for the missing driver ratios should
reflect the characteristics of the missing [EPA–HQ–OA–2018–0107; FRL–9979–41– other file sharing system). For
information as well as possible.’’ Id. at OP] additional submission methods, the full
13. EPA public comment policy,
amozie on DSK3GDR082PROD with PROPOSALS1
The Postal Service states that the RIN 2010–AA12 information about CBI or multimedia
impacts associated with procedure two submissions, and general guidance on
Increasing Consistency and making effective comments, please visit
are ‘‘less clear cut’’ than procedure one Transparency in Considering Costs
because ‘‘there is no intuitive baseline https://www.epa.gov/dockets/
and Benefits in the Rulemaking commenting-epa-dockets.
against which to compare [results].’’ Id. Process
at 20. The Postal Service explains that FOR FURTHER INFORMATION CONTACT: For
‘‘[i]n theory, the logical baseline would AGENCY: Environmental Protection further information on this document,
be actual inframarginal costs calculated Agency (EPA). please contact Elizabeth Kopits,
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Document Created: 2018-06-12 23:59:29
Document Modified: 2018-06-12 23:59:29
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of proposed rulemaking. | |
| Dates | Comments are due: June 29, 2018. | |
| Contact | David A. Trissell, General Counsel, at 202-789-6820. | |
| FR Citation | 83 FR 27523 |
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