Oct. 28--Ameren Illinois customers who for years have been promised a choice of electricity suppliers now have one.

Chicago-based BlueStar Energy Services Inc. said Tuesday that it has started enrolling customers, becoming the first alternative electricity supplier to offer service to residential and small business customers in central and Southern Illinois.

The company, which already sells power to larger businesses in Illinois, Maryland and Washington, says it will offer lower electricity prices than the incumbent utilities through May 2010 by taking advantage of a decline in wholesale power prices.

How much lower isn't certain. Electricity prices will vary by customer based on when they sign up and how much energy they use.

BlueStar hopes to offer customers savings by taking advantage of its flexibility and buying power when prices are low, CEO Guy Morgan said. By contrast, utilities purchase power in increments of a year or longer every June.

Of course, there's no guarantee BlueStar customers will save money if they leave Ameren. In fact, they could end up paying more if market prices rise beyond what Ameren pays for electricity.

The Citizens Utility Board, a Chicago-based consumer group, urged utility customers to carefully study any offer before switching electricity providers.

"Consumers don't just need choice," CUB spokesman Jim Chilsen said. "They need informed choice."

Also, Ameren still will be responsible for delivering power to BlueStar customers through its network of poles and wires, so customers cannot simply switch electricity providers to escape the utility's proposed rate increase, Chilsen said.

Finally, BlueStar customers are required to sign up for service through December 2010. If they break the contract, they will be charged $200 to compensate the company for power purchases, Morgan said.

Still, the company's foray into the Illinois residential market represents an important step for electric deregulation in Illinois.

The Illinois Legislature passed a bill in 1997 to open the state's retail electricity markets. While competition for industrial and large commercial customers has flourished in recent years, small electricity consumers were left tethered to their incumbent utilities.

BlueStar will rely initially on word-of-mouth marketing, partly to make sure the process of enrolling customers goes smoothly.

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