Abundant natural gas, lots of land and a supportive political environment were all reasons why data centers had been flocking to Texas.

Now, the picture isn't so clear. On Monday afternoon, Texas Governor Greg Abbott directed the state's grid operator and utility regulator to conduct a "comprehensive verification and audit" of all data centers asking for interconnection, and said no additional data centers can be approved until that process is completed. This puts a pause on a new process-named Batch Zero-that Texas greenlighted in June to fast-track interconnection requests from data centers.

Shares of power plant owners in Texas took a hit on Tuesday. Vistra fell 7% in midday trading, while NRG Energy declined 16%. NRG also reported worse-than-expected earnings on Tuesday morning.

Independent power producers such as Vistra and NRG stand to benefit from a faster interconnection process, which would help raise power prices for all power generators. In its earnings call on Tuesday, NRG said power prices "out the curve," referring to futures pricing, remained low partly because of concerns around interconnection delays.

The heightened scrutiny around grid connection is bullish for companies that make off-grid power equipment. Shares of engine-maker Innio and Caterpillar both rose 7%. Caterpillar shares are also up on better-than-expected earnings and a raised outlook.

Abbott is up for re-election later this year and has made data centers an "election-year issue centered on protecting grid reliability, water supplies and Texas consumers," according to research firm ClearView Energy Partners. There may be "little political incentive to complete the audit and reopen reviews before Election Day on November 3," according to ClearView. The outlook for Texas-exposed power stocks is likely to stay murky until then.