Postal rate proposal sent back to commission

By RANDOLPH E. SCHMID | May 24, 2011 | 1:29 PM EDT

WASHINGTON (AP) — Whether postal rates should rise above the level of inflation is back in the hands of the independent Postal Regulatory Commission.

The federal Court of Appeals for the District of Columbia on Tuesday told the commission to reconsider its rejection of the Postal Service's request last fall to raise rates. Normally increases are limited to the inflation rate, but the post office cited the unusual circumstances of the recession and the decline in mail volume.

The court said the commission was correct in concluding that, to get the unusual rate increase, the post office must show that the problem is due to the unusual circumstances. But the court said it was wrong to insist that the amount of the increase precisely match the losses caused by those circumstances.