Core Viewpoint - The National Energy Regulatory Council (NERC) has set the total allowed income cap for AB "Energijos skirstymo operatorius" (ESO) at EUR 433.0 million for 2026, reflecting a 14.4% increase from EUR 378.7 million in 2025, driven by higher investments and lower regulatory differences [5]. Income Cap Summary - The total income cap for ESO's electricity and natural gas distribution services is established at EUR 433.0 million for 2026, which is 14.4% higher than the 2025 cap [5]. - The income cap for electricity distribution services is set at EUR 376.9 million for 2026, a 17.2% increase from EUR 321.6 million in 2025 [3]. - The income cap for natural gas distribution services is set at EUR 56.1 million for 2026, showing a slight decrease of 1.6% from EUR 57.1 million in 2025 [3]. Regulatory Components Summary - The Regulatory Asset Base (RAB) for ESO is projected to be EUR 1,906.5 million in 2026, up 6.2% from EUR 1,794.9 million in 2025 [3]. - The Weighted Average Cost of Capital (WACC) for electricity distribution is slightly reduced to 5.77% in 2026 from 5.82% in 2025, while the WACC for natural gas distribution remains unchanged at 5.6% [3]. - Depreciation and amortization (D&A) for regulatory purposes is expected to increase to EUR 109.5 million for 2026, a 10.0% rise from EUR 99.6 million in 2025 [3]. Factors Influencing Changes - The increase in the income cap is attributed to higher investments in the network as per the 10-year Investment Plan, leading to an increased additional tariff component, return on investment, and depreciation and amortization [6]. - There is a noted decrease in temporary regulatory differences due to a higher return in 2025 [6].