Federal power marketing administrations are entities created by the U.S. government to market the power output of federal projects — primarily hydropower on federal dams built by the Army Corps of Engineers, the Bureau of Reclamation, and the International Boundary and Water Commission (IBWC). There are four federal power agencies: Bonneville Power Administration (BPA), Southwestern Power Administration (SWPA), Southeastern Power Administration (SEPA), and Western Area Power Administration (WAPA).
The federal power agencies generally perform the role of generation provider to a vertically integrated public utility sector (i.e., to munis, PUDs, and co-ops) but in some cases do sell directly to Indian tribes, federal agencies, and large industrial customers. Due to federal law, preference in the sale of federal power must be given to public bodies and co-ops. IOUs can buy federal power only if it is surplus power that cannot be sold to the preference customers. In some limited cases, the agencies are also authorized to sell directly to large industrial customers.
The agencies also own transmission lines that run from their projects to other utility-owned grids. In some cases, such as in the western U.S., these transmission lines can be quite extensive. In these areas it is common for the federal power agency to also assume the system operations function. In some cases the Federal Power Agencies also act as an electric system operator.