Key takeaways
- A QOZB can hold cash for up to 31 months under a written working capital plan and schedule, and overlapping plans can extend the period to a maximum of 62 months from the first cash infusion.
- Delay caused by government action on a completed application can toll the working capital period; no guidance says whether utility study or construction delays count.
- Dominion Energy said in 2024 that large data center hookups in Northern Virginia could take up to seven years, and LBNL reports median generator interconnection times above four years.
- Large-load tariffs now require long minimum payments: AEP Ohio's requires new loads above 25 MW to pay for at least 85% of subscribed demand for up to 12 years.
- Investors have 180 days to invest a gain, so most sponsors finish land and power work with other capital before calling Opportunity Zone fund equity.
Why does power set the schedule for an Opportunity Zone data center?
Because grid capacity is scarcer than construction capacity. LBNL's 2025 update projects data centers using about 649 TWh in 2030 in its reference case, about 11.8% of U.S. electricity.19 Utilities are struggling to keep up: Dominion Energy said in 2024 that connecting data centers above 100 MW could take one to three years longer than before, for total waits of up to seven years in Northern Virginia.5
Building is faster. Epoch AI's tracking of recent gigawatt-scale campuses shows 1 to 3.6 years from the start of construction to 1 GW of power7, and NTT Facilities has put the traditional design and construction period for large data centers at 3 to 4 years.8 On-site generation has its own queue: LBNL's Queued Up report finds the median time from interconnection request to commercial operation exceeded four years for generators built in 2018 to 2024, and only 13% of capacity that requested interconnection in 2000 to 2019 reached operation by the end of 2024.6
Fig. 1Power and construction timelines against the Opportunity Zone windows
- Large-load hookup, Northern Virginia (Dominion, 2024)Up to 7 years
- Generator interconnection, median (2018 to 2024 projects)Over 4 years
- Traditional large data center design and build (NTT)3 to 4 years
- Construction start to 1 GW, recent campuses (Epoch AI)1 to 3.6 years
- Working capital safe harbor, one plan to the maximum31 to 62 months
- Substantial improvement window30 months
The investor implication is direct: money raised long before power is available can sit idle past the point the rules allow. The full development schedule is in Opportunity Zone data center development timeline.
Which Opportunity Zone clocks run during a data center build?
Several, at the investor, fund and business levels. They are set by §1400Z-2 and the Treasury regulations.1,2
Fig. 2Opportunity Zone clocks that overlap a data center build
Day 0
Capital gain realized
Investor's 180-day window opens
Day 180
Last day to invest in a QOF
Equity, not debt
Month 6
New-cash exclusion runs out
Regulations are generally read to let a QOF exclude new cash held six months or less from the 90% test; confirm terms
Month 30
Substantial improvement period
For purchased existing buildings
Month 31
One working capital plan ends
Written plan and schedule required
Month 62
Maximum working capital period
Overlapping or sequential plans
Year 5
Deferred gain included
10% step-up, 30% for a rural fund
Year 10
Exclusion election available
Fair market value basis on sale
| Clock | Length | What it means for a data center |
|---|---|---|
| Investor investment window | 180 days from the gain | Fund equity is called when investors have gains, not when the utility is ready |
| QOF 90% asset test | Two semiannual testing dates | The fund must invest in the QOZB promptly; it cannot hold cash for long |
| Working capital safe harbor | 31 months per plan, 62 months maximum | The QOZB must spend cash substantially as scheduled |
| Substantial improvement | 30 months | Conversions must add enough building basis in time |
| Five-year inclusion | Five years from investment | Investors pay tax on the deferred gain even if the project is late |
The safe harbor is explained in The Opportunity Zone working capital safe harbor and the investor deadline in The Opportunity Zone 180-day investment rule.
Do utility delays toll the working capital safe harbor?
Not clearly. The regulations toll the working capital period when delay is caused by government action on an application that is complete, and only where no other action can be taken to advance the project during the delay. A federally declared disaster can add up to 24 months.3,4
Utility delays are harder. An investor-owned utility's study backlog or equipment lead time is not obviously government action, and no guidance addresses whether it counts. Some steps in the power process do involve government bodies, such as a state commission's review of a large-load contract or a local permit for a substation, and those may be stronger candidates for tolling if the application was complete. This is analysis, not settled law.
Rule changes are possible. Notice 2026-55, with comments due November 23, 2026, asks whether a QOZB should be allowed to modify an existing working capital plan.17 Until guidance changes, plan as if tolling will not be available for utility delays.
How do large-load tariffs affect the Opportunity Zone timeline?
They add long payment commitments and collateral that must be in place before service, which pushes more spending earlier in the schedule.
| Utility or regulator | Applies to | Key terms |
|---|---|---|
| AEP Ohio (PUCO order, July 9, 2025) | New data centers above 25 MW | Pay for at least 85% of subscribed demand for up to 12 years, including a 4-year ramp; financial viability proof, exit fees and collateral9 |
| Georgia Power (Georgia PSC rule, January 23, 2025) | New customers above 100 MW | Contract terms of 5 to 15 years, minimum billing, recovery of upstream costs; contracts reviewed by the PSC10 |
| Dominion Energy Virginia (GS-5 class) | Loads above 25 MW with a load factor of 75% or more | Obligations begin January 2027; minimum payments reported at 85% of transmission and distribution demand and 60% of generation demand11 |
Collateral and minimum bills tie up cash. If a QOZB posts cash collateral, that cash is financial property, and nonqualified financial property must stay under 5% of the QOZB's average property basis unless it is covered by the working capital safe harbor. Letters of credit or parent support may work better. This is a practical consideration for counsel. Interconnection options are compared in Power interconnection for Opportunity Zone data centers.
What federal actions could change large-load interconnection timelines?
Several proceedings are underway, and their outcomes are still moving. On December 18, 2025, FERC found PJM's tariff unjust and unreasonable for lacking clear rules for co-located load and directed new transmission service options for it.12 On October 23, 2025, the Energy Secretary used DOE Organization Act section 403 to send FERC a proposed rulemaking on interconnecting loads above 20 MW, opened as Docket RM26-4-000.13
In April 2026, FERC said it would act on the large-load docket by the end of June 2026.14 Secondary reports say FERC then issued show-cause orders to the regional grid operators rather than a single final rule; that outcome should be confirmed on ferc.gov. For Opportunity Zone planning, none of these actions changes the tax clocks, and any faster process will take time to reach individual utilities.
Can on-site generation shorten the timeline?
Sometimes, and it changes what the QOZB owns. Large campuses increasingly pair with dedicated generation. The Homer City campus in Pennsylvania plans seven gas turbines for a 4.5 GW campus, with first turbine deliveries expected in 2026 and operation targeted for 2027.15 In Louisiana, regulators approved three Entergy gas plants of about 2.26 GW to serve Meta's Hyperion campus.20
For Opportunity Zone purposes, generation owned by the QOZB and located in the zone can be qualifying property if it meets the usual purchase, original use and location tests, while generation owned by a utility or independent producer is outside the QOZB. Tax credits also matter: Public Law 119-21 ends the §45Y and §48E credits for wind and solar facilities placed in service after 2027 unless construction began by July 4, 2026.16 Generator interconnection still takes time, so on-site power is not an automatic shortcut.6
How should sponsors sequence power and Opportunity Zone capital?
Secure power first, then call Opportunity Zone equity in tranches sized to what can be spent inside each working capital plan.
- 1.Use non-Opportunity Zone capital for land options, utility studies and early permits, so no fund cash waits on the utility.
- 2.Obtain a signed electric service agreement or equivalent commitment with a delivery schedule before the first QOF closing.
- 3.Size each QOF call and QOZB infusion to what the written schedule can spend within 31 months.
- 4.Adopt a written working capital plan for each phase, tied to the utility's delivery dates.
- 5.Track every government application and its completeness date to preserve any tolling argument.
- 6.At the fund level, reinvest proceeds from any asset sale within 12 months to protect the 90% test; this does not defer the gain itself.18
- 7.Consider wholly rural zones where transmission is available and the 50% substantial improvement and 30% rural step-up apply.
Fig. 3Sequencing power before Opportunity Zone equity
Illustrative- Utility studies and land option (non-OZ capital)
- Electric service agreement signed
- First QOF closing and 31-month plan
- Construction
- Utility energizes first phase
Sponsors with rural sites should also read Rural data centers and Opportunity Zones.
Common questions
How long can an Opportunity Zone business hold cash while waiting for power?
Up to 31 months under one written working capital plan, and up to 62 months from the first cash infusion with overlapping or sequential plans. Cash must be spent substantially as the schedule says.3,4
Does a utility's study backlog count as a government delay?
No guidance says so. Tolling applies to delay from government action on a completed application. Treat utility study and equipment delays as not tolling unless counsel concludes otherwise.3
What happens to investors if the project is late?
Their deferred gain is still included five years after their investment, whether or not the data center is operating, and the 10-year clock keeps running.1
Should a fund raise equity before signing a power agreement?
Usually not. Raising before power is committed risks idle cash at both the fund and the QOZB level, and power waits in constrained markets have reached up to seven years. A common approach is to fund early studies with other capital.5
Sources
Every numbered note in this guide links to the source below.
- 1.U.S. Government Publishing Office (GovInfo), “26 U.S.C. 1400Z-2, Special rules for capital gains invested in opportunity zones,” n.d. govinfo.gov
- 2.Electronic Code of Federal Regulations, “26 CFR 1.1400Z2(d)-1, Qualified opportunity funds and qualified opportunity zone businesses,” n.d. ecfr.gov
- 3.ArentFox Schiff, “Qualified Opportunity Zones, the Final Regulations: What's New, What's Changed, and What's Stayed the Same,” 2020. afslaw.com
- 4.RSM US, “Final QOZ regulations include favorable interpretations,” 2019. rsmus.com
- 5.Bloomberg (via BNN Bloomberg), “Data centers face seven-year wait for power hookups in Virginia,” 2024. bnnbloomberg.ca
- 6.Lawrence Berkeley National Laboratory, “Queued Up: 2025 Edition,” 2025. emp.lbl.gov
- 7.Epoch AI, “Data center buildout speeds,” 2026. epoch.ai
- 8.W.Media, “NTT targets 2028 to implement modular construction to halve hyperscale completion time,” n.d. w.media
- 9.POWER Magazine, “Regulator approves AEP Ohio's landmark data center tariff,” 2025. powermag.com
- 10.Georgia Public Service Commission, “Media advisory: data centers rule,” 2025. psc.ga.gov
- 11.American Action Forum, “Virginia's New Data Center Electricity Rate Class,” 2026. americanactionforum.org
- 12.Morgan Lewis, “FERC Directs Co-Location Reforms in PJM,” 2025. morganlewis.com
- 13.Federal Energy Regulatory Commission, “Interconnection of Large Loads to the Interstate Transmission System, Docket RM26-4-000,” n.d. ferc.gov
- 14.Holland & Knight, “FERC to Act on Large-Load Interconnection Docket in June,” 2026. hklaw.com
- 15.Data Center Dynamics, “Homer City and Kiewit unveil plans for 4.5GW natural gas-powered AI data center in Pennsylvania,” 2025. datacenterdynamics.com
- 16.Mintz, “The OBBBA: A Major Shift in Federal Clean Energy Tax Incentives,” 2025. mintz.com
- 17.Internal Revenue Service, “Notice 2026-55, Request for Additional Comments on Issues under Section 1400Z-2,” 2026. irs.gov
- 18.Legal Information Institute, Cornell Law School, “26 CFR 1.1400Z2(f)-1, Administrative rules,” n.d. law.cornell.edu
- 19.Lawrence Berkeley National Laboratory, “United States Data Center Energy Usage Report: 2025 Update,” 2026. eta-publications.lbl.gov
- 20.Data Center Dynamics, “Entergy obtains approval to construct three gas facilities to serve Meta's 2GW data center in Louisiana,” 2025. datacenterdynamics.com
OZ Data Centers
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