FERC Is About to Rule on US Data Center Grid Connections. Here's What It Means — and Why France Just Got More Valuable.

The Federal Energy Regulatory Commission is poised to issue what former FERC Chairman Neil Chatterjee calls "the most significant FERC action in decades" — a ruling on how data centers connect to the US grid. Expected before end of June 2026. Two tracks. Both matter for AI infrastructure deployment globally.

TRACK 1 — PJM CO-LOCATION: THE HYPERSCALER POWER PLAY

For the past two years, hyperscalers have been exploring a workaround to the PJM interconnection queue: co-locating data centers with power generation assets — typically natural gas plants or nuclear facilities — and buying power directly, bypassing the transmission grid entirely. This is the "off-grid pivot" that Meta's tent deployments and Bloom Energy fuel cell installations represent. It is not idealism. It is engineering pragmatism in the face of a grid that cannot deliver.

The FERC co-location ruling will determine whether this model is legal under existing tariff structures. If FERC blesses it, the off-grid pivot accelerates — more hyperscalers bypass the transmission grid entirely, the interconnection queue becomes even more irrelevant, and the power sector bifurcates between grid-connected operators and self-powered campuses.

If FERC restricts it, hyperscalers face a choice: wait in the interconnection queue, pay full upgrade costs, or look elsewhere. That "elsewhere" is exactly what France represents.

TRACK 2 — FEDERAL RULEMAKING: WHO PAYS FOR THE GRID

The more consequential track is the DOE-directed federal rulemaking on large load interconnection. The core question: should hyperscalers and large data center operators bear the full cost of the transmission upgrades required to connect them to the grid?

Today, those costs are socialised across all ratepayers — when a 500 MW data center requires a new 345 kV substation, the cost is spread across the utility's customer base. The proposed rulemaking would shift that cost directly to the large power user. Full cost allocation. No socialisation.

The investment implication is direct: if large power users must self-fund transmission upgrades, existing grid interconnects become dramatically more valuable — they represent pre-paid, pre-approved grid access that cannot be replicated at any price in the near term. And markets with open grid processes at deterministic costs — like France — become structurally more attractive for new deployments.

WHY REGULATORY CERTAINTY IS ITSELF THE CATALYST

Former FERC Chairman Chatterjee's observation cuts to the heart of what has paralysed US AI data center investment for the past 18 months: uncertainty. Developers have been waiting to understand the rules before committing capital. The FERC ruling — whatever its substance — removes that uncertainty.

If FERC blesses co-location: the off-grid market accelerates, a new asset class emerges (power generation + data center campuses), and capital flows to developers who can execute that model. PJM queue becomes less relevant.

If FERC restricts co-location and requires full cost allocation: the economics of US grid-connected power worsen materially for new large loads. Existing interconnects command a premium. Europe — specifically France — becomes the rational alternative for developers without existing US grid positions.

Either way, capital moves. The question is where.

THE FRANCE POSITION — UNCHANGED AND STRENGTHENED

The FERC ruling does not change France's fundamental grid advantage. It quantifies the alternative.

The most important word in that comparison is "published." RTE's connection process is published, with defined durations, defined costs, and defined outcomes. There is no equivalent of a FERC ruling hanging over France's grid connection framework. The rules are known. The timeline is deterministic. The capacity is identified.

If FERC's ruling triggers the investment cycle that Chatterjee expects, some of that capital will go to US deployments. But for developers who cannot wait 8–12 years, or who cannot absorb $200M–$800M in transmission upgrade costs, France's 18-month brownfield timeline and €2M–20M connection cost represent a different order of magnitude.

WHAT TO WATCH — AND WHAT GRIDREADINESS IS TRACKING

We are monitoring two specific outcomes from the FERC ruling that will directly affect the France opportunity timeline.

First, the co-location decision: if FERC restricts co-location broadly, expect immediate acceleration of European site selection activity from hyperscalers currently in the co-location exploration phase. They will need a Plan B grid strategy within 6–12 months.

Second, the cost allocation language: if the ruling includes specific language on large load cost allocation, watch for immediate re-evaluation of project economics by infrastructure funds with US grid positions. Projects that were marginal under socialised costs become non-viable under full allocation — and those funds will be looking for deployable capital alternatives.

France's fast-track capacity — 4,800 MW across 5 sites, 250 MW deliverable in 2 years — will absorb the first wave of redirected capital. The brownfield HTB pipeline absorbs the second. Both windows are finite. The FERC ruling may accelerate the timeline for both.

→ Related: 3,000 GW US queue — the numbers · France site selection guide · GridReadiness consulting mandates

Sources: Bloomberg (Aigner & Malik, June 2026) · FERC docket · Neil Chatterjee statement · PJM capacity auction data December 2025 · RTE 2026 · GridReadiness field intelligence. This article will be updated as the ruling drops.