NEW YORK ( TheStreet) - Rising out of the ashes of bankruptcy in 2008, the nation's  leading power provider Calpine (CPN)  is poised to benefit from two reforms in the energy industry. 

Houston-based Calpine, which sells electricity to the wholesale market, is expected to gain an advantage from the Obama administration's push to cut carbon emissions and also reforms being sought by the nation's largest electricity grid operator PJM. The grid operator wants its power plant partners to deliver greater reliability with uninterrupted electricity.

Earlier this month, PJM, which coordinates the flow of power by working with power plant operators such as Calpine, received approval from its board to file an enhanced capacity performance proposal with the U.S. Federal Energy Regulatory Commission.

PJM's reforms were sparked by the "transformation of the PJM generation fleet," due to the abundant supply of cheap shale gas, as well as "last winter's polar vortex weather events," said Brett Kerr, Calpine's spokesperson, in an email to TheStreet.  Those events led to one of the highest levels of winter electricity demand, which undermined PJM's grid operations.

Consequently, PJM revised its incentive plan, seeking to enhance its compensation to power plant operators that provide greater generator availability during periods of system stress, while substantially penalizing those generators that underperform.

PJM is planning to hold a capacity auction in May and could apply the new structure that favors those power plant operators that can deliver a continuous supply of electricity throughout the year, in every season, and have dual-fuel capabilities.

Calpine is in a strong position to capitalize on the auction, because "more than 22% of Calpine power generation capacity is located within PJM's territory" and fulfills these requirements

As a result of PJM's reforms, Calpine's annual EBITDA - earnings before interest, taxes, depreciation and amortization - could climb by $150 million, wrote UBS's analyst Julien Dumoulin-Smith in his most recent report. Calpine's shares have climbed 6.6% this year and currently hover around $21.

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Furthermore, the U.S. Environmental Protection Agency (EPA) wants to reduce America's carbon emissions during power generation to 30% below the level seen in 2005. It hopes to achieve this goal by the end of 2030, threatening the future prospects of several coal-based power production companies, such as American Electric Power (AEP) - Get American Electric Power Company, Inc. Report and Southern Co. (SO) - Get Southern Company Report , but this could work well for Calpine.

That's because the EPA's plans to cut carbon emissions relies heavily on increasing the nation's dependence on "natural gas fired combined cycle power plants" that emit far less carbon and other pollutants than fossil fuel sources, such as coal, Kerr explained. "Calpine has the largest fleet of modern, efficient and flexible natural gas-fired power plants in the country," Kerr added.

When it comes to power generation, natural gas-based power plants emit about half as much carbon dioxide, and even lower quantities of nitrogen and sulfur oxides, as compared to coal-based power plants, according to Environmental Protection Agency estimates.

On the flip side, an emerging threat is coming from the increasing role clean energy is playing in the national grid, said UBS's Dumoulin-Smith. The build out of new solar and wind energy based power plants across the U.S, particularly in Texas where more than a third of Calpine's power capacity is located, can disrupt the supply-demand fundamentals, which can have an adverse impact on prices.

However, it is unlikely that solar or wind power could pose a serious threat to Calpine in the foreseeable future. Renewable energy is largely "intermittent" sources of electricity, which cannot promise uninterrupted supply, Kerr said. That disadvantage could come to the forefront under severe weather conditions and, therefore, be an issue with PJM's reforms.

"The flexibility of natural gas plants makes them critical to grid reliability, so that when the sun isn't shining or the wind isn't blowing, Calpine's plants are there to help keep the lights on," Kerr elaborated. 

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.