The word "co-op" has long conjured thoughts of crunchy 20-somethings buying organic mueslix and bok choy at a local member-owned shop. But these days, "co-op" is taking on a whole new meaning -- and it has nothing to do with locally-grown vegetables. Instead, these nonprofits are gaining popularity for selling another basic necessity at a discount: fuel.

Fuel co-ops buy heating oil in bulk, thereby reaping a discount to retail prices. Operating as a middleman for members, they negotiate with local, full-service heating-oil dealers and can shave hundreds of dollars off consumers ballooning energy bills.

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As fuel prices continue to climb, membership at fuel co-ops continues to grow. Heat USA, for example, a fuel-buying group that operates in 10 Northeastern states, has seen its membership increase by 25% over the last two years, says Tim Irving, the executive director. The Mass Energy Consumers Alliance, a fuel buying group in Massachusetts with 14,000 members, expects its membership to increase by 20% this year, with September being the biggest month for new members we ve seen, says Phil Lindsay, oil program director for Mass Energy.

Interested? Here's what you need to know before joining a fuel co-op:

Potential savings

Since fuel co-ops operate without a profit motive, they re able to keep margins down and offer good values, Wolfe says. Most co-ops claim members pay about 15 to 30 cents per gallon below the average fuel price. The resulting savings more than offsets any membership fees, which at some co-ops can range from $20 to $30 a year.

For example, the average price for heating oil in Rhode Island was $3.65 a gallon on Oct. 6. At People s Power & Light, a Rhode Island fuel co-op, it was $3.21. That means PP&L members who bought heating oil that day saved 44 cents per gallon. Assuming similar price differences over the course of the winter, customers could save $360 (based on the average New England resident purchasing 820 gallons for the season, according to Wolfe). The one-year membership fee at PP&L: $20.

Some co-ops offer additional discounts to members who pay within a certain timeframe. For instance, both Mass Energy and Rhode Island's PP&L offer various payment options, one of which gives members 30 days to pay their fuel bill from the delivery date. Customers who pay within five to 10 days of delivery, however, can take two to six cents per gallon off their bill.

Pricing options

Typically, co-op members choose among several pricing methods. They can either pay for oil based on the daily price charged by dealers, but at a set discount. Or they can prepay for all the oil they'll need for the season at a fixed price.

Consumers who choose the fixed-price plan need to keep in mind that the strategy carries some risk. They'll only save money if the price of oil rises dramatically later in the winter, explains Lindsay of Mass Energy. Instead of making six purchases over the course of the year and spreading your risk, you re buying oil on one day, he says. That lowers your odds of buying it on the best day. Because of this, Mass Energy doesn't offer members the option to prebuy.

Shopping for a co-op

To find out if there s a co-op in your area, do a simple online search using the words oil co-op and Philadelphia, for example. Here are a few things to look for.

Reduced fees
Many co-ops offer special discounts on annual membership fees to members of certain unions, seniors and other residents on fixed incomes. For example, Citizen Action Fuel Group, which operates in 22 counties in New York State, normally charges a $25 yearly membership fee. Senior citizens, however, pay $20 and residents receiving disability payments pay just $5.

Access to full-service dealers
Make sure the co-op is working with full-service companies that are available 24 hours a day to handle emergency calls and perform equipment maintenance.

Healthy financials
If you re going to opt for a fixed-price plan where you pay everything upfront, make sure the dealer is on strong financial footing. Some dealers, Wolfe says, are struggling with cash-flow problems due to high carrying costs and customers falling behind on payments, and risk going out of business. You have to think twice if you enter into one of these long-term, fixed-price agreements, he says. If your dealer closes its doors, you could lose money. One thing you can do to protect yourself, Wolfe says, is to ask the co-op what happens if your dealer goes under.