A warren of cluttered offices housing a 51-year-old local oil dealership is at the core of something very new to Western Massachusetts: An energy co-operative.

With the purchase last month of three local heating oil dealers, Co-opPlus Energy Services became, in fact, the only energy co-operative in the state.

The deal brings those family-owned dealerships — the traditional model for delivery of heating oil to homes and businesses in New England — under the umbrella of Co-opPlus.

Co-opPlus purchased Lacasse Heating and Cooling of Holyoke, Express Oil of Southampton, and Halon Oil of Granby for an undisclosed sum.

The three dealerships will keep their names, and their owners will stay on in the new company. The three companies will retain their offices and staff, too.

What will change is the operation and control of those enterprises. While oil is not a commodity that brings deep discounts with larger purchases, executives believe the merger will make some operational efficiencies possible that could help save customers money.

More importantly, the form of ownership changes. Members of the co-op are the owners of the company.

"We are consumer-owned, we are not profit-driven," declared Timothy T. Clegg, chief executive officer of Co-opPlus. "We are literally working for our customers."

To make the purchase, Co-opPlus Energy Services received a $3.9 million loan from First International Bank of Hartford. That loan was guaranteed by the U.S. Department of Agriculture's Rural Development business and industry loan guarantee program.

Matthew J. Ide, senior vice president for energy finance at First International, said "the fact that it was a co-operative was an additional challenge," but First International has an expertise in lending to fuel oil and propane retailers, and is one of the top users of the USDA's loan guarantee program.

When it comes to lending to a co-operative, "the biggest concern is that there really isn't an owner, because it's a consortium of members," Ide said. 

But Co-opPlus has leadership that included the executive of an Indiana electric co-operative, who came out of retirement to help set up the operations, and Clegg, who "brings a level of financial sophistication that you don't normally see in a proprietor-owned oil retailer," Ide said.

And "they've got Maurice Lacasse, who has got a lifetime of operational experience," added Ide, who is a native of Southwick.

Clegg would not disclose the total cost of the deal, citing the owners' privacy.

In total, the three companies employ about 50 people, and none will be laid off.

"We're trying to add people and develop the people we have and attract new people to grow into these high-tech service occupations," Clegg said.

Combined, the three companies have about 7,000 year-round heating oil customers. Lacasse brought about 3,500 and the two smaller companies contributed the rest.

The combined companies expect to sell between 7 million and 10 million gallons over the next year.

Co-opPlus Energy Services is a wholly owned subsidiary of Co-opPlus of Western Massachusetts, formed just three years ago by a collection of consumer groups, credit unions and environmental groups

For most people in New England, the word "co-op" may evoke the image of a shabby place selling bulk granola, grains and dried beans, but that's not the reality in the rest of the country.

"The thing that makes a co-op is whether the consumers are the ones who own and control it," according to Lynn M. Benander, chief executive officer of Cooperative Development Institute in Greenfield, which provides a variety of business services to cooperatives around New England.

"So there are electric cooperatives around the country that serve 11 percent of the people in the U.S., have been bringing them electricity for 60 years, at very low cost, covering 75 percent of the land mass of the United States," Benander said.

The world of co-operatives includes some very big business — there are 20 co-operatives with annual sales in excess of $1 billion, including Land O' Lakes, Ocean Spray and Ace Hardware, Clegg said.

"A good analogy may be that retailer-owned food and hardware co-operatives make it possible for hundreds of independent store owners to successfully compete with large chains," Clegg said. 

By buying the three oil dealerships and putting them into a co-operative structure with co-operative goals, "it guarantees control of these very important dealers stays in Western Massachusetts," Clegg said. "The stock of the co-op isn't in play in the mergers and acquisitions game."

Ide said the bank feels confident in lending so much money to the enterprise because Western Massachusetts "is an area where people would have an interest in finding out more about co-operative membership."

Ide said the more rural areas of Western Massachusetts are underserved by fuel oil dealers, creating opportunities for the new company. 

Maurice N. Lacasse, 62, who has been working in his family's oil business since he was 11, said he agreed to sell his company and stay on because "I was excited about the co-op idea," as well as the notion of having back-up enabling him to take longer vacations with his wife, Sheila, who will serve the new entity as office manager.

Co-opPlus Energy Services also to expand into Franklin and Berkshire counties, and has no intention of laying off current staffers.

"When you look across all three of these organizations, there's a generation of very, very experienced technicians, service managers, sales managers," Clegg said.

A long-term goal is to gain the expertise to provide businesses with on-site electrical generation, either through fuel cells or microturbines, Clegg said.

Co-opPlus of Western Massachusetts was formed in 1997 when it became clear that the electricity industry was going to be deregulated by the state, with the goal of providing members low-cost electricity.

Because the price for electricity is still too low to make a profit for marketers, it didn't make sense for the co-op to try to market electricity, she said.

If electricity was not feasible to offer, "oil was the next energy source that was very highly utilized, where we could start our business successfully," Benander said.

Co-opPlus did research on whether to start its own company or buy existing dealerships, ultimately deciding that "we didn't want to be putting people out of work, by starting a new company that would be competing for market share," Benander said.

Co-opPlus, with founders that include organizations with an environmental focus, also believed that it could "set a higher standard" for safety and environmental responsibility in handling the oil, Clegg said. 

"Helping people lower their bills through conservation is kind of a part of our core mission," Clegg said.

Lacasse is in tune with that goal. He said he's been interested in conserving energy since the 1973 Arab oil embargo, becoming the first commercial solar energy dealer in Western Massachusetts.

"I've always said I'd rather have two customers burn 1,000 gallons than one burning 1,000 gallons," he said.

Co-opPlus of Western Massachusetts started out with contributions of $500 each from the organizing partners, which then leveraged a $700,000 investment by the National Rural Utilities Cooperative Finance Corporation, Clegg said.

In its three years of existence, Co-opPlus has brought in $6 million in financing, including the $3.9 million loan to help pay for the three oil dealerships and another $100,000 in loans.

The $2 million balance includes seller financing and equity investments, Clegg said.

Clegg said the co-op has raised more than $200,000 from all its Western Massachusetts investors.

Customers of the three oil dealers can continue as before, or join the co-op, though the mechanism for doing that is still being worked out, Clegg said.

"We're going to make it easy for customers to become members, because we don't want to put anything in the way," Clegg said.