FIRST AMENDMENT
TO EMPLOYMENT AGREEMENT
 THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT st ENERGY WEST, INCORPORATED KEVIN J. DEGENSTEIN
 RECITALS:
 A.
    
    The Company and the Executive are parties to an Employment Agreement dated as
of August 25, 2006 (the Original Agreement).B.
    
    In order to ensure compliance with Section 409A of the Internal Revenue Code of
1986, as amended, and the U.S. Department of Treasury regulations and other
interpretive guidance issued thereunder, the Company and the Executive desire to amend
the Original Agreement as set forth in this Amendment.
 ACCORDINGLY,
 1. Changes to Section 5 of the Original Agreement .
 (a)
    
    Section 5(f) of the Original Agreement is deleted from the
Original Agreement in its entirety.
 2. Addition of New Section 13 to the Original Agreement .
 13.
    
    Section 409A.
 (a)
    
    To the extent applicable, this
Agreement shall be interpreted in accordance with Section
409A of the Internal Revenue Code of 1986, as amended (the
Code), and the Department of Treasury regulations and other
interpretive guidance issued thereunder, each as in effect
from time to time (collectively, Section 409A).




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(b)
    
    Notwithstanding anything herein
to the contrary, to ensure compliance with Section 409A, the
Company shall pay:
     Section 5(a)
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(c)
    
    If the Executive is a specified
employee (within the meaning of Treasury Regulation Section
1.409A-1(i)), as determined by the Company in accordance with
Section 409A, as of the date of the Executives separation from
service (within the meaning of Treasury Regulation Section
1.409A-1(h)), to the extent that any payments or benefits under
this Agreement are subject to Section 409A and the delayed
payment or distribution of all or any portion of such amounts to
which the Executive is entitled under this Agreement is required
in order to
avoid a prohibited distribution under Section
409A(a)(2)(B)(i) of the Code, then such portion deferred
under this Section 13(c) shall be paid or distributed
(without interest) to the Executive in a lump sum on the
earlier of (i) the date that is six (6) months following
termination of the Executives employment, (ii) a date that
is no later than thirty (30) days after the date of the
Executives death or (iii) the earliest date as is permitted
under Section 409A. For purposes of clarity, the six (6)
month delay shall not apply in the case of severance pay
contemplated by Treasury Regulation Section
1.409A-1(b)(9)(iii) to the extent of the limits set forth
therein. Any remaining payments due under this Agreement
shall be paid as otherwise provided herein.
 (d)
    
    To the maximum extent
permitted by applicable law, the amounts payable to the
Executive under this Agreement shall be made in reliance upon
Treasury Regulation Section 1.409A-1(b)(9) (with respect to
separation pay plans) or Treasury Regulation Section
1.409A-1(b)(4) (with respect to short-term deferrals).
 (e)
    
    As provided in Internal
Revenue Notice 2007-86, notwithstanding any other provision
of this Agreement, with respect to an election or amendment
to change a time and form of payment under this Agreement
that is subject to Section 409A made on or after January 1,
2008 and on or before December 31, 2008, the election or
amendment may apply only to amounts that would not otherwise
be payable in 2008 and may not cause an amount to be paid in
2008 that would not otherwise be payable in 2008.
 3. Full Force and Effect .
 4. Miscellaneous .
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IN WITNESS WHEREOF,
 /s/ Kevin J. DegensteinKevin J. DegensteinENERGY WEST, INCORPORATEDBy:
    Thomas J. SmithIts:  Chief Financial Officer  4