31346 Federal Register / Vol. 83, No. 129 / Thursday, July 5, 2018 / Proposed Rules 

1Petition of the United States Postal Service for 

the Initiation of a Proceeding to Consider Proposed 

Changes in Analytical Principles (Proposal Four), 

June 25, 2018 (Petition). 

2One type of fee that may be incurred when using 

a debit card is an interchange fee, which is the 

largest categorical contributor to total debit card 

processing fees for a transaction. Id. at 5. A 

merchant pays an interchange fee to the debit card 

issuer whenever a customer makes a purchase using 

a debit card. See 12 CFR 235.2(j) (defining 

‘‘interchange transaction fee’’ as ‘‘any fee 

established, charged, or received by a payment card 

network and paid by a merchant or an acquirer for 

the purpose of compensating an issuer for its 

involvement in an electronic debit transaction.’’). 

The debit card fees referred to in the Petition and 

this Order are interchange fees. 

3Petition, Proposal Four at 1; see Docket No. 

RM2015–4, Order Approving Analytical Principle 

Used in Periodic Reporting (Proposal Eleven), 

February 9, 2015 (Order No. 2350). 

4 Id.; see Docket No. ACR2017, Library Reference 

USPS–FY17–32, December 29, 2017. 

5 Id. at 2–3; see Docket No. ACR2017, 

Supplemental Response of the United States Postal 

Service to Question 1.b of Chairman’s Information 

Request No. 2, February 23, 2018 (Response to CHIR 

No. 2, Question 1.b). 

interests of the general public in this 

proceeding. 

IV. Ordering Paragraphs 

It is ordered: 

1. The Commission establishes Docket 

No. RM2018–8 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 Five), filed June 26, 

2018. 

2. Comments by interested persons in 

this proceeding are due no later than 

August 22, 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. 2018–14367 Filed 7–3–18; 8:45 am] 

BILLING CODE 7710–FW–P 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3050 

[Docket No. RM2018–7; Order No. 4685] 

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 Four). 

This document informs the public of the 

filing, invites public comment, and 

takes other administrative steps. 

DATES: Comments are due: July 23, 

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 Four 

III. Notice and Comment 

IV. Ordering Paragraphs 

I. Introduction 

On June 25, 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 principles changes 

filed in this docket as Proposal Four. 

II. Proposal Four 

Background. Proposal Four would 

change the costing methodology for 

assigning expenses related to debit card 

transactions in the component named 

Retail Credit Card Fees (Component No. 

126) in Cost Segment 13. Petition, 

Proposal Four at 1. Debit card 

transactions, which are purchases made 

using debit cards, incur fees that 

merchants pay to the debit card issuer.2

For example, when a customer 

purchases a product or service from the 

Postal Service using a debit card, the 

Postal Service pays the debit card issuer 

a fee for each transaction. 

In Docket No. RM2015–4, the 

Commission approved the current 

methodology for assigning expenses 

related to credit and debit card 

transactions.3 The current methodology 

treats these expenses as fully volume 

variable and assigns them to products in 

the same proportions as the Postal 

Service revenue realized from aggregate 

credit and debit card transactions. 

Petition, Proposal Four at 1. When 

preparing the FY 2017 Annual 

Compliance Report (ACR), the Postal 

Service explains that it recognized two 

flaws in the current methodology. Id. 

First, the current methodology uses the 

total of both credit and debit card fees 

when calculating distribution factors. 

Id. This assumes that transactions made 

with debit and credit cards are similar, 

which is not true for every product. Id. 

For example, Priority Mail generates 

more revenue from credit card 

purchases than debit cards. Id. 

Conversely, Money Orders cannot be 

purchased using credit cards. Id. 

The Postal Service asserts that when 

calculating a distribution key, the type 

of card used (debit or credit) becomes 

more important because total credit card 

fees are almost four times greater than 

total debit card fees. Id. Because of this 

incorrect assumption, the current 

methodology misallocates expenses 

related to debit and credit card fees, 

especially for products that are more 

heavily purchased by one card type. Id. 

The second flaw in the current 

methodology identified by the Postal 

Service is that the distribution factors 

do not fully align with actual expenses 

incurred from the usage of debit and 

credit cards. Id. at 2. For example, for 

Money Order transactions, the Postal 

Service charges the customer the face 

value of the Money Order plus a Special 

Services fee. Id. When calculating the 

Money Order share of total ‘‘revenue’’ 

for distribution purposes, the current 

methodology only considers the Special 

Services fee the Postal Service charges 

the customer. Id. The Postal Service 

asserts that this methodology is 

erroneous because the amount the 

Postal Service pays to the debit card 

provider is based on the entire 

transaction amount, including the face 

value of the money order, rather than 

just the Special Services fee charged. Id. 

To address these two flaws in the 

current methodology, the Postal Service 

made two corrections to Library 

Reference USPS–FY17–32, which was 

filed with the FY 2017 ACR.4 First, the 

Postal Service separated credit and debit 

card fees to develop different sets of 

distribution factors for these fees. 

Petition, Proposal Four at 2. Second, the 

set of distribution factors for debit cards 

used the aggregate face value of Money 

Orders purchased with debit cards in 

conjunction with the revenue from all 

other products. Id. 

In a supplemental Chairman’s 

Information Request (CHIR) response, 

the Postal Service proposed a model 

attempting to account for the recognized 

major components of debit card fees.5 In 

the FY 2017 Annual Compliance 


amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 129 / Thursday, July 5, 2018 / Proposed Rules 31347 

6 Docket No. ACR2017, Annual Compliance 

Determination, March 29, 2018, at 64 (FY 2017 

ACD). The Commission’s rules require the Postal 

Service to use only accepted analytical principles 

in its annual periodic reports to the Commission, 

including the ACR. 39 CFR 3050.10. 

7 Id. at 3–4. As discussed below, the ‘‘pertransaction’’ cost appears to refer to fixed debit card 

fees, which are the same for each transaction 

regardless of the transaction amount. See Response 

to CHIR No. 2, Question 1.b. 

8Petition, Proposal Four at 5. The 22 cent pertransaction cost includes one cent for fraud 

protection costs. Id. 

9 Id. at 6. The ‘‘per-transaction’’ component 

appears to refer to fixed debit card fees, which are 

the same for each transaction regardless of the 

transaction amount. See Response to CHIR No. 2, 

Question 1.b. 

10See Petition, Excel file 

‘‘Prop.4.Debit.Card.Attachment.xlsx.’’ 

Determination (ACD), the Commission 

stated that the proposed model was not 

an approved methodology for attributing 

expenses related to debit card fees.6 It 

directed the Postal Service to continue 

investigating issues related to debit card 

fee attribution and update the 

Commission on its progress and any 

potential corresponding methodological 

changes within 90 days after the ACD 

was issued. FY 2017 ACD at 64. The 

Postal Service asserts that Proposal Four 

is a result of this investigation. Petition, 

Proposal Four at 3. 

Proposal description. Proposal Four 

would change the methodology for 

assigning expenses related to debit card 

transactions (Debit Card Expenses). 

Proposal Four would disaggregate total 

Debit Card Expenses into two cost 

pools: Transactions and Proceeds. Id. 

The Transactions cost pool would 

account for Debit Card Expenses for 

regulated transactions, which have 

limits on debit card fee amounts based 

on Federal Reserve regulations. Id. at 3, 

5. Unregulated transactions do not have 

these limits. Id. at 5. 

To calculate the amount of Debit Card 

Expenses allocated to the Transactions 

cost pool, the Postal Service would first 

determine the number of regulated debit 

card transactions. Id. at 3. This is the 

total number of debit card transactions 

multiplied by the proportion of 

regulated transactions. The number of 

regulated transactions would then be 

multiplied by the approximate pertransaction cost to calculate the amount 

of Debit Card Expenses allocated to the 

Transactions cost pool.7 The remaining 

amount would be allocated to the 

Proceeds cost pool. Petition, Proposal 

Four at 4. 

For example, in FY 2017, total Debit 

Card Expenses were approximately 

$58.6 million. Id. at 3. Proposal Four 

would disaggregate these expenses 

between the Transactions cost pool and 

Proceeds cost pool. There were 

approximately 150 million debit card 

transactions, 65 percent of which were 

regulated. Id. at 3–4. The approximate 

per-transaction cost was 22 cents. Id. at 

4. Thus, the Transactions cost pool 

would equal approximately $21.3 

million (150 million total debit card 

transactions × 65 percent regulated 

transactions × 22 cents per-transaction 

cost). Id. The remaining amount of $37.3 

million ($58.6 million ¥$21.3 million) 

would be allocated to the Proceeds cost 

pool. Id. 

Under Proposal Four, Debit Card 

Expenses in the Transactions cost pool 

would be assigned to products 

proportionally based on the number of 

tenders captured from the Retail Data 

Mart. Id. Debit Card Expenses in the 

Proceeds cost pool would be assigned to 

products in proportion to the total 

proceeds realized with debit cards, 

which is the same distribution key used 

under the current methodology. Id. The 

final Debit Card Expenses assigned to 

each product would be the sum total of 

the respective amounts from each cost 

pool. Id. 

The Postal Service states that Proposal 

Four reflects the proposed model 

presented in Docket No. ACR2017. Id. 

However, it explains that Proposal Four 

differs by distinguishing between 

regulated and unregulated transactions. 

Id. By contrast, the proposed model 

assumed that all of the debit card 

transactions were regulated. Id. 

Rationale. The Postal Service asserts 

that Proposal Four would improve the 

accuracy of its costing methods by more 

closely reflecting how debit card fees 

are incurred. Id. at 4–5. Debit card fees 

generally have two components: A fixed 

fee per transaction (regardless of 

transaction amount) and a variable fee 

that changes based on the transaction 

amount. Response to CHIR No. 2, 

Question 1.b. For regulated transactions, 

the Federal Reserve limits debit card 

fees to 22 cents per transaction (fixed 

fee) plus 0.05 percent of the transaction 

(variable fee).8 Proposal Four would 

account for the fixed debit card fees in 

the Transactions cost pool for regulated 

transactions. Id. The Proceeds cost pool 

would account for the variable debit 

card fees along with other fees, 

including fees for unregulated debit 

card transactions. Id. 

The Postal Service asserts that 

Proposal Four would address a flaw in 

the current methodology. Id. at 6. The 

current methodology assigns all Debit 

Card Expenses to products in the same 

proportions as the Postal Service 

revenue realized from aggregate debit 

card transactions. Id. at 1. However, this 

methodology ignores the fixed ‘‘pertransaction’’ component of Debit Card 

Expenses.9 The current methodology 

would be appropriate if all products had 

the same average revenue per 

transaction. Petition, Proposal Four at 6. 

Because they do not, products with 

below average revenues per transaction 

are assigned less than their appropriate 

share of the Debit Card Expenses related 

to the fixed fee. Id. Conversely, products 

with above average revenues per 

transaction are assigned more than their 

share of these expenses. Id. 

For example, the average revenue per 

transaction for Money Orders is 

substantially higher than those of other 

products. Id. at 7. The Postal Service 

asserts that the current methodology 

overstated the Debit Card Expenses 

assigned to Money Orders in FY 2017. 

Id. at 6–7. The Postal Service points out 

that applying Proposal Four would have 

properly distinguished between the 

fixed per-transaction and residual 

components for regulated transactions, 

which would have resulted in a more 

accurate assignment of Debit Card 

Expenses to Money Orders. Id. at 7. The 

Transactions cost pool would account 

for the fixed per-transaction component 

of Debit Card Expenses. See id. at 4. The 

Postal Service concludes that adopting 

Proposal Four would improve the 

accuracy of its costing methods by more 

closely aligning with the way debit card 

fees are incurred. Id. 

Impact. The Petition includes a table 

illustrating the cost impacts of Proposal 

Four. Id. at 7–8. This table compares the 

Debit Card Expenses distribution as 

presented in the FY 2017 ACR with the 

distributions that would have resulted if 

Proposal Four had been used. Id. at 7. 

The Postal Service explains that the 

most significant change to the cost 

coverages filed with the FY 2017 ACR 

would be to Money Orders, which 

would have experienced an increase in 

cost coverage under Proposal Four from 

97 percent to approximately 107 

percent. On a unit cost basis, the impact 

on all other products ‘‘would be either 

trivial or, in most instances, entirely 

immaterial.’’ Id. at 7–8. The Postal 

Service provides further details in 

workpapers filed with the Petition.10

III. Notice and Comment 

The Commission establishes Docket 

No. RM2018–7 to consider 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 Four no later than July 23, 

2018. Pursuant to 39 U.S.C. 505, Jennaca 

D. Upperman is designated as an officer 


amozie on DSK3GDR082PROD with PROPOSALS1
31348 Federal Register / Vol. 83, No. 129 / Thursday, July 5, 2018 / Proposed Rules 

1See 80 FR 36483 (June 25, 2015). 

2See WVDEP’s June 6, 2017 submittal letter, 

included in the docket for this action. 3See 134 S.Ct. 2427. 

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. RM2018–7 to consider 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 Four), filed June 25, 2018. 

2. Comments by interested persons in 

this proceeding are due no later than 

July 23, 2018. 

3. Pursuant to 39 U.S.C. 505, the 

Commission appoints Jennaca D. 

Upperman 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. 2018–14349 Filed 7–3–18; 8:45 am] 

BILLING CODE 7710–FW–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R03–OAR–2017–0502; FRL–9980– 

32—Region 3] 

Approval and Promulgation of Air 

Quality Implementation Plans; West 

Virginia; Permits for Construction and 

Major Modification of Major Stationary 

Sources for the Prevention of 

Significant Deterioration of Air Quality 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is proposing to approve a 

state implementation plan (SIP) revision 

submitted by the State of West Virginia. 

This revision pertains to West Virginia’s 

Prevention of Significant Deterioration 

(PSD) program. This action is being 

taken under the Clean Air Act (CAA). 

DATES: Written comments must be 

received on or before August 6, 2018. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R03– 

OAR–2017–0502 at http://

www.regulations.gov, or via email to 

duke.gerallyn@epa.gov. For comments 

submitted at Regulations.gov, follow the 

online instructions for submitting 

comments. Once submitted, comments 

cannot be edited or removed from 

Regulations.gov. For either manner of 

submission, EPA may publish any 

comment received to its public docket. 

Do not submit electronically any 

information you consider to be 

confidential business information (CBI) 

or other information whose disclosure is 

restricted by statute. Multimedia 

submissions (audio, video, etc.) must be 

accompanied by a written comment. 

The written comment is considered the 

official comment and should include 

discussion of all points you wish to 

make. EPA will generally not consider 

comments or comment contents located 

outside of the primary submission (i.e., 

on the web, cloud, or other file sharing 

system). For additional submission 

methods, please contact the person 

identified in the FOR FURTHER

INFORMATION CONTACT section. For the 

full EPA public comment policy, 

information about CBI or multimedia 

submissions, and general guidance on 

making effective comments, please visit 

http://www2.epa.gov/dockets/ 

commenting-epa-dockets. 

FOR FURTHER INFORMATION CONTACT: 

David Talley, (215) 814–2117, or by 

email at talley.david@epa.gov. 

SUPPLEMENTARY INFORMATION: On June 6, 

2017, the West Virginia Department of 

Environmental Protection (WVDEP), on 

behalf of the State of West Virginia, 

submitted a revision to its PSD 

regulations found at title 45, chapter 14 

of the Code of State Rules (CSR) as a 

revision to the West Virginia SIP. 

I. Background 

WVDEP’s June 6, 2017 SIP submittal 

included a number of revisions to West 

Virginia’s PSD regulations under 

45CSR14. The revisions were largely 

non-substantive and administrative in 

nature. However, as discussed in 

subsequent sections of this notice, 

WVDEP’s SIP submittal also contained 

revisions to PSD provisions relating to 

the regulation of greenhouse gases 

(GHGs). Additionally, WVDEP’s June 6, 

2017 submittal letter references EPA’s 

conditional approval 1 of two SIP 

submittals (June 6, 2012 and July 1, 

2014), related to the regulation of fine 

particulate matter (PM2.5). Specifically, 

the letter states, ‘‘. . .EPA may 

subsequently issue a final rule in which 

West Virginia’s conditional approval of 

the 2012 and 2014 SIP revisions of 

45CSR14 will become final approvals.’’ 2

EPA notes that full and final approval 

has already been granted to West 

Virginia’s 2012 and 2014 submittals, 

and that there are no outstanding issues 

related to WVDEP’s regulation of fine 

particulate matter (PM2.5). See 81 FR 

53008 (August 11, 2016). 

In a June 3, 2010 final rulemaking 

action, EPA promulgated regulations 

known as ‘‘the Tailoring Rule,’’ which 

phased in permitting requirements for 

GHG emissions from stationary sources 

under the CAA PSD and title V 

permitting programs. See 75 FR 31514. 

For Step 1 of the Tailoring Rule, which 

began on January 2, 2011, PSD or title 

V requirements applied to sources of 

GHG emissions only if the sources were 

subject to PSD or title V ‘‘anyway’’ due 

to their emissions of non-GHG 

pollutants. These sources are referred to 

as ‘‘anyway sources.’’ Step 2 of the 

Tailoring Rule, which began on July 1, 

2011, applied the PSD and title V 

permitting requirements under the CAA 

to sources that were classified as major, 

and, thus, required to obtain a permit, 

based solely on their potential GHG 

emissions. Step 2 also applied to 

modifications of otherwise major 

sources that required a PSD permit 

because they increased only GHGs 

above applicable levels in the EPA 

regulations. 

On June 23, 2014, the United States 

Supreme Court, in Utility Air Regulatory 

Group (UARG) v. Environmental 

Protection Agency,3 issued a decision 

addressing the Tailoring Rule and the 

application of PSD permitting 

requirements to GHG emissions. The 

Supreme Court said that the EPA may 

not treat GHGs as an air pollutant for 

purposes of determining whether a 

source is a major source required to 

obtain a PSD permit. The Court also said 

that the EPA could continue to require 

that PSD permits, otherwise required 

based on emissions of pollutants other 

than GHGs, contain limitations on GHG 

emissions based on the application of 

Best Available Control Technology 

(BACT). The Supreme Court decision 

effectively upheld PSD permitting 

requirements for GHG emissions under 

Step 1 of the Tailoring Rule for ‘‘anyway 

sources’’ and invalidated PSD 

permitting requirements for Step 2 

sources. 

In accordance with the Supreme 

Court decision, on April 10, 2015, the 

U.S. Court of Appeals for the District of 

Columbia Circuit (D.C. Circuit) issued 

an amended judgment vacating the 

regulations that implemented Step 2 of 

the Tailoring Rule, but not the 

regulations that implement Step 1 of the 


amozie on DSK3GDR082PROD with PROPOSALS1