THE PURPOSE OF THIS AMENDED 10-K IS TO INCLUDE 
SUPPLEMENTAL INFORMATION REQUESTED BY THE UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION, FEBRUARY 28, 1997.
         
         UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                      Washington, D. C. 20549
                            FORM 10-KA
                                  
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1996
                                 OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES 
      EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File number 0-14183
                     ENERGY WEST INCORPORATED
      (Exact name of registrant as specified in its charter)

          Montana                            81-0141785
       (State or other jurisdiction of    (I.R.S. Employer 
      incorporation or organization)     Identification No.)
                                 
          1 First Avenue South, Great Falls, Mt.   59401
        (Address of principal executive         (Zip Code)
                             offices)
Registrant's telephone number, including area code  (406)-791-7500
   Securities registered pursuant to Section 12(b) of the Act:
  Title of each class      Name of Exchange on which registered
        Common Stock - Par Value $.15               NASDAQ

Indicate by check mark whether the registrant (1) has filed all
reports required  to be filed by Section 13 or 15(d) of the
Securities Exchange Act  of 1934 during the preceding 12 months (or
for such shorter period that  the  registrant was required to file
such reports),  and (2)  has
been subject to such filing requirements for the past 90 days.  Yes
[X] No  

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (229.45 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X].

The aggregate market value of the voting stock held by non-affiliates
of the registrant as of September 20,  1996    Common Stock, $.15 Par
Value - $11,997,032
The number of shares outstanding of the issuer's classes of common
stock as of September 20, 1996 Common Stock, $.15 Par Value -
2,336,245 shares
                                 
               DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual shareholders' report for the year ended June
30, 1996 are incorporated by reference into Parts I and II.
Portions of the proxy statement for the annual shareholders meeting
held November 21, 1996 are incorporated by reference into Part III.

PART I
Item 2. - Properties
          ----------

The Company owns all of its properties in Great Falls, including an
office building, a service and operating center, regulating stations
and its distribution system.  In Wyoming, the Company owns its
distribution system, including 167 miles of transmission pipeline. 
Office and service buildings for the Cody division are leased under
long-term leases.  RMF owns buildings, propane tanks and related
metering and regulating equipment for the Wyoming and Arizona propane
distribution operations.  The Company owns mains and service lines
for the Broken Bow division's propane vapor distribution operation in
Payson, Arizona.  In June, 1996, Petrogas a division of RMF sold its
buildings and improvements in Payson, Arizona to an outside party and
signed a lease agreement with the same party for a period of ten (10)
years, with a provision of extension of the lease for two successive
five (5) year periods.  RMF has the right of first refusal to
purchase the property back at the end of the initial term or either
extension term.  The Broken Bow division leases building space from
Petrogas for its propane vapor distribution operations in Payson.

Environmental Matters
---------------------

The Company owns property on which it operated a manufactured gas
plant from 1909 to 1928.  The site is currently used as a service
center and to store certain equipment and materials and supplies. 
The coal gasification process utilized in the plant resulted in the
production of certain by-products which have been classified by the
federal government and the state of Montana as hazardous to the
environment.  After management became aware of the potential of
contamination on this site, it initiated an assessment of the
property through the assistance of a qualified consulting firm.  That
assessment revealed the presence of certain hazardous material in
quantities exceeding tolerances established for such material by
regulatory authorities.  After making required notifications of that
condition to federal and state regulatory authorities, a report
summarizing the assessment was filed with the State of Montana
Department of Health and Environmental Science (MDHES).  Subsequent
to that submittal a meeting was held with a representative of the
MDHES wherein a process was agreed upon to arrive at appropriate
remediation of the site.  The costs incurred by the Company to date
approximate $320,000 and have been capitalized as other deferred
charges.  Until further work is done regarding remediation
alternatives, no further estimate of the costs of remediation can be
made.  
   
However, management believes that regardless of the
alternative selected, the costs incurred will not materially affect
the Company's financial position, results of operations and net cash
flows.
    

The Company received formal approval from MPSC to recover the costs
associated with the cleanup of this site.  The Company will begin
recovery of costs incurred at June 30, 1995 over two years through a
surcharge in billing rates effective July 1, 1995.  Management
intends to request that future costs be recovered over a similar time
period.  The total recoveries collected through June 30, 1996 is
$214,000.

                              14
*****************************************************************************  

                             ITEM 7 
                                 
                    Energy West Annual Report
                                 
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF CONSOLIDATED OPERATIONS

RESULTS OF CONSOLIDATED OPERATIONS

Fiscal 1996 Compared to Fiscal 1995

Net Income
     The Company's net income for fiscal 1996 was $1,407,000
compared to $1,513,000 in fiscal 1995 a decrease of $106,000 or 7%
from 1995.  Net income in Fiscal 1996 included a gain on the sale of
assets of approximately $236,000.  The following summary describes
the components of the change between years.

Revenue
     Operating revenues increased approximately 3%.  Regulated
revenues decreased 3% compared to the prior year  due to a rate
decrease in the Great Falls division in Montana, effective July 1,
1995.  This decrease in rates was partially offset by colder weather
this year than one year ago in the Great Falls and Cody utility
divisions, increased transport revenues in the Cody division
operations and the West Yellowstone revenues in this start-up
operation.   Nonregulated revenues increased approximately 6%, from
increased bulk propane sales in the areas served by Wyo L-P gas in
Wyoming, Missouri River Propane in Montana and Petrogas in Arizona. 
Both Missouri River Propane and Petrogas, sell propane to related
regulated utilities Cascade Gas Company and  Broken Bow Gas Company
respectively.  Operating revenues in Energy West Resources decreased
by 20% however gas trading revenues increased by 34% due to customer
growth and an increase in volumes.

Gross Margin
     Gross margins (operating revenues less cost of gas purchased
and cost of gas trading) increased approximately $664,000 in 1996. 
Regulatory gross margins increased approximately $740,000 because of
higher margins from natural gas sales in the Great Falls and Cody
divisions.  Margins were tempered by the effects of a rate reduction
in the Great Falls division of approximately $260,000 annually,
ordered by the Montana Public Service Commission which went into
effect on July 1, 1995.  In addition, margins of West Yellowstone are
reflected in 1996 this fiscal year.  Nonregulated gross margins
decreased approximately $84,000, primarily due to smaller margins in
Energy West Resources' gas marketing operations.



                                1
***********************************************************************
   
Revenues
     Regulated revenues decreased from $24,363,000 in fiscal 1995 to
$23,672,000 in fiscal 1996 or 3%, primarily due to a decrease in the
revenues of the Great Falls division of approximately $1,550,000, due
to a $260,000 rate decrease ordered by the Montana Public Service
Commission and a reduction in gas costs reducing rates by
approximately $290,000 and the shift of Malmstrom Air Force Base
revenues to a transportation customer, further reducing revenues by
approximately $1,000,000.  This was offset by the inclusion of West
Yellowstone revenues of approximately $300,000 and increased Cody
division revenues of approximately $330,000, due to increased volumes
sold due to customer growth and weather and higher transportation
revenues and increases in the Broken Bow and Cascade divisions, due
to customer growth.  Gas purchases decreased from $15,077,500 in
fiscal 1995 to $13,646,200 in fiscal 1996 or 10%, primarily due to a
reduction in natural gas costs.

Operating Income
     Regulated operating income increased approximately $65,000 in
fiscal 1996 or 3%, primarily due to increased gross margins of
approximately $740,000, due to customer growth, colder weather and
higher transportation sales and the inclusion of West Yellowstone
margins.  This was offset by increases in distribution, general,
administrative and general expenses of approximately $490,000, due to
operations growth and inflation, increases in depreciation and
amortization expenses of approximately $153,000, due to additional
utility plant and increases in taxes other than income of
approximately $29,000, due to higher property taxes in all three
states served by Energy West.

     Nonregulated operating income decreased approximately $190,000
in fiscal 1996 or 20%, due to smaller margins in Energy West
Resources' gas marketing operations of approximately $84,000, higher
operating and maintenance expenses of approximately $156,000 due to
inflation and growth of nonregulated operations, offset partially by
lower depreciation and amortization costs.
    


                                2
***********************************************************************

Other Expenses
     Operating expenses (excluding cost of gas sales) increased
approximately $2,042,000 or 18% in 1996.  The primary reason for this
increase  was due to normal inflationary trends, lower capitalized
payroll since the completion of the West Yellowstone system as well
as the addition of West Yellowstone's utility operating expenses this
fiscal year. 
     As a result of the above changes, operating income decreased 4%
from  $3,092,000 in 1995 to $2,965,000 in 1996.  Total interest
expense for the Company was $1,243,000 for fiscal 1996, up from
$939,000 in fiscal 1995, due to higher short-term borrowing used in
expansion of the Company's  utility systems.   Other additions to or
deductions from operating income in determining net income remained
comparable between the two years.  

Fiscal 1995 Compared to Fiscal 1994

Net Income
     The Company's net income for fiscal 1995 was $1,513,000
compared to $1,351,000 in fiscal 1994, an increase of $162,000 or 12%
over 1994.  However fiscal 1994 net income included an accounting
change of $92,000 due to the cumulative effect on prior years of the
change in accounting for income taxes.  Before the effect of the
accounting change, net income increased $254,000 or 20% in 1995 over
1994.  The notes to the financial statements further describe this
accounting change. The following summary describes the components of
the change between years.

Revenue
     Operating revenues increased approximately 4%, primarily due to
gas trading revenues; regulated utility revenues declined slightly as
compared to the prior year, representing 76% of total revenues in
1995 versus 80% in fiscal 1994. Nonregulated revenues increased
slightly due to growth in the nonregulated Arizona customer base,
served by the Petrogas division. 

Gross Margin
     Gross margins (operating revenues less cost of gas purchased
and cost of gas trading) increased approximately $994,000 in 1995. 
Regulatory gross margins increased approximately $530,000, due to the
Great Falls and Broken Bow divisions.  The Great Falls division
realized higher margins due to a timing difference in purchased gas
costs.  The Broken Bow gross margin increased due to customer growth
in the Payson, Arizona area.  The Cody gross margins remained
relatively unchanged, even though sales were down.  Nonregulated
gross margins increased approximately $464,000, primarily due to
additional gas trading activity.


                                3
***********************************************************************

Other Expenses
     Operating expenses (excluding cost of gas sales) increased
approximately $538,000 in 1995.  The primary reason for this increase
was increased depreciation and amortization of approximately $95,000
reflecting the addition or acquisition of property, plant and
equipment, while the remaining increase was due to inflation and
additional personnel required in the growing operations of the
Company.  

     As a result of the above changes in gross margins and
offsetting increases in operation expenses, depreciation and
amortization, operating income increased 17% from $2,636,000 in 1994
to $3,092,000 in 1995.  Total interest expense for the Company was
approximately $939,000 for fiscal 1995, down slightly from $962,000
in fiscal 1994.   Other additions to or deductions from operating
income in determining net income remained comparable between the two
years.  




OPERATING RESULTS OF THE COMPANY'S UTILITY OPERATIONS

                                            Years Ended June 30
                                         1996        1995        1994
                                         ----        ----        ----
                                              (in thousands)
Operating revenues:           
     Great Falls division              $15,737     $16,812     $16,900
     Cody division                       5,940       5,609       5,813          
     Broken Bow division                 1,995       1,942       1,708
                                       -------     -------     -------

Total operating revenues                23,672      24,363      24,421 
Gas purchased                           13,646      15,077      15,667
                                       -------     -------     -------
Gross Margin                            10,026       9,286       8,754
Operating expenses                       7,810       7,136       6,673
Interest charges    [see note below]     1,145         908         895
Other utility (income) expense-net        (118)       (126)       (106)
Federal and state income taxes             385         454         410
                                       -------     -------     -------
Net utility income                        $804       $ 914        $882
                                       =======     =======     =======
     [interest charges for utility and non-utility operations do not
      equal total interest charges for the Company, due to eliminating entries
      between entities.]

     Fiscal 1996 Compared to Fiscal 1995

     

                                4
***********************************************************************

Revenues and Gross Margins
          Utility operating revenues in fiscal 1996 were approximately 
$23,672,000 compared to $24,363,000 in fiscal 1995.  Gross margin, which 
is defined as operating  revenues less gas purchased, was approximately 
$10,026,000 for fiscal 1996 compared to approximately $9,286,000 in 
fiscal 1995.
          Overall revenues decreased from fiscal 1995 due primarily
to a $250,000 rate  decrease in the Great Falls division in
Montana, effective July 1, 1995. In addition, Malmstrom AFB became a 
transport customer of the Great Falls division in Fiscal 1996, further 
reducing operating revenues. Energy West Resources sold natural gas 
to Malmstrom AFB in Fiscal 1996. This decrease in rates and the Malmstrom 
change to transport was tempered by colder weather this year than one year 
ago in all utility divisions and recognition of West Yellowstone revenues
this year in this start-up operation.  While utility revenues decreased from 
fiscal 1995, margins increased approximately 8% for fiscal 1996, primarily 
due to higher margins from natural gas sales in the Great Falls and Cody 
divisions and propane sales in the Broken Bow division because of customer 
growth and colder weather than one year ago in the Great Falls and Cody 
divisions and the addition of West Yellowstone's margins in fiscal 1996, in 
this start-up operation. The winter heating season in the Great Falls 
division in fiscal 1996 was approximately 10% colder than fiscal 1995 and 
8% colder than "normal" (i.e., the average temperature during the preceding 
30 years). The winter heating season in the Cody division was approximately 
5% colder than fiscal 1995, and very close to normal.  The Broken Bow 
division experienced an 18% warmer period than 1995 and 15% warmer period 
than normal.  

Operating Expenses
     Utility operating expenses, exclusive of the cost of gas purchased and 
federal and state income taxes, were approximately $7,810,000 for fiscal 
1996, as compared to approximately $7,136,000 for fiscal 1995.  The 9% 
increase in the period is due to normal inflationary trends, less payroll 
capitalized since the completion of the West Yellowstone system as well as 
the addition of West Yellowstone's utility operating expenses of approximately 
$257,000 this fiscal year in this start-up operation.

Interest Charges
     Interest charges allocable to the Company's utility divisions were 
approximately  $1,146,000 in  fiscal 1996, as compared to approximately 
$908,000 in fiscal 1995.  Long term debt interest decreased, however
short-term interest increased primarily due to facility expansion, which has
been temporarily financed with short-term debt.
 
Income Taxes
     State and federal income taxes of the company's utility divisions was 
approximately $385,000 in fiscal 1996, as compared to approximately $454,000 
in fiscal 1995.  The 15% decrease was primarily attributable to a $184,000    
decrease in pre-tax income of the utility divisions.



                                5
***********************************************************************

Fiscal 1995 Compared to Fiscal 1994

Revenues and Gross Margins
     Utility operating revenues in fiscal 1995 were $24,363,000 compared to 
$24,421,000 in fiscal 1994.  Gross margin, which is defined as operating 
revenues less gas purchased, was $9,286,000 for fiscal 1995 compared to 
$8,754,000 in fiscal 1994.  

     Although utility revenues remained unchanged from fiscal 1994, margins 
increased 6% for fiscal 1995, primarily due to higher margins experienced by 
the Great Falls division when compared to margins experienced in fiscal 1994 
as a result of a timing difference in purchased gas costs booked, as well as  
higher margins in the Broken  Bow division as a result of growth in the 
Payson, Arizona area.  The winter heating season in the Great Falls division 
in fiscal 1995 was approximately 1% warmer than fiscal 1994 and 1% warmer 
than "normal" (i.e., the average temperature during the preceding 30 years).  
The winter heating season in the Cody division was approximately 1% warmer 
than fiscal 1994 and 5% warmer than normal.  The Broken Bow division 
experienced a 14% increase in revenues and a 24% increase in margins, as a 
result of growth in the Payson, Arizona area.

Operating Expenses
     Utility operating expenses, exclusive of the cost of gas purchased and 
federal and state income taxes, were $7,136,000 for fiscal 1995, as compared 
to $6,673,000 for fiscal 1994.  The 7% increase in the period is due to 
increased depreciation and amortization,  reflecting the addition or 
acquisition of property, plant and  equipment, while the remaining increase 
was due to inflation and additional personnel required in the growing utility 
operations of the Company. 

Interest Charges
     Interest charges allocable to the Company's utility divisions were 
$908,000 in fiscal 1995, as compared to $895,000 in fiscal 1994.  Short-term 
interest charges increased as a result of higher interest rates compared to a 
year ago, however this was offset by lower interest payments on long-term 
debt, due to repayment of principle.
 
Income Taxes
     State and federal income taxes of the company's utility divisions was  
$454,000 in fiscal 1995, as compared to $410,000 in fiscal 1994.  The 11% 
increase was primarily attributable to a $76,000 increase in pre-tax income 
of the utility divisions.


                                6
***********************************************************************

OPERATING RESULTS OF EACH OF THE COMPANY'S NON-UTILITY SUBSIDIARIES

                                               Years Ended June 30
                                          1996        1995       1994
                                          ----        ----       ----
                                                 (in thousands)
ROCKY MOUNTAIN FUELS (RMF)
     Operating revenues                  $4,352      $3,902      $3,759
     Cost of propane                      2,540       2,171       2,050
     Operating expenses                   1,548       1,484       1,399
     Other (income) expense-net             (64)        (33)        (67)
     Gain on sale lease back               (236)          0           0
     Interest expense [see note below]      112          87         113
     Federal and state income taxes         181          71          85
     Cumulative effect on prior years
     of change in accounting for                  
     income taxes                                                     4
                                         ------      ------      ------
Net income                               $  271      $  122      $  183
                                         ======      ======      ======

ENERGY WEST RESOURCES (Formerly Vesta-Transenergy)
     Operating revenues                  $   61      $   76       $  77
     Gas trading revenue                  4,348       3,239       1,965
     Operating expenses                     201         172         170
     Cost of gas trading                  3,773       2,500       1,667
     Other (income) expense-net             (20)        (43)        (44) 
     Federal and state income taxes         169         259          94
     Cumulative effect on prior years
     of change in accounting for 
     income taxes                                                    42
                                         ------      ------      ------
Net income                               $  285      $  427      $  197
                                         ======      ======      ======

MONTANA SUN
     Operating revenues                  $   97       $  99        $100
     Operating expenses                      48          47          61
     Other (income) expense-net             (24)        (16)        (24)
     Interest expense [see note below]        0         (14)         (4)
     Federal and state income taxes          27          31          26
     Cumulative effect on prior years
     of change in accounting for 
     income taxes                                                    46
                                         ------      ------      ------
Net income                               $   47      $   51      $   87
                                         ======      ======      ======

Total Non-Utility Net Income             $  603      $  600      $  467
                                         ======      ======      ======

   [interest charges for utility and non-utility operations do not equal total 
    interest charges for the Company, due to eliminating entries between
    entities.]


                                7
***********************************************************************

Non-Utility Operations

Rocky Mountain Fuels
     For the fiscal year ended June 30, 1996, Rocky Mountain Fuels
(RMF) generated net income of approximately $271,000 compared to
$122,000 for fiscal 1995.  Approximately $140,000 of RMF's increase
in net income for fiscal 1996 was attributable to the Petrogas
division in Arizona, because of a gain on a sale of assets of
Petrogas and approximately $76,000 was due to decreasing depreciation
expense in all of RMF's operating divisions as a result of changing
the estimated useful lives for certain propane properties from twelve
and fifteen years to twenty years, to better reflect its useful
lives. Missouri River Propane and Big Horn Answering Service had a
loss for the fiscal year. 

     For the fiscal year ended June 30, 1995, RMF generated net
income of $122,000 compared to $183,000 for fiscal 1994. 
Approximately $68,000 of RMF's net income for fiscal 1995 was
attributable to the Wyo L-P division and approximately $63,000 was
attributable to the Petrogas division.  RMF income decreased because
of higher overheads, due to reallocation from the utility operation
and normal inflationary trends along with higher depreciation. 
Missouri River Propane and Big Horn Answering Service account for the
balance, which had a net loss for fiscal 1995.



Energy West Resources (Formerly Vesta - Transenergy)
     For fiscal 1996, Energy West Resources' (EWR) net income was
approximately $285,000 compared to $427,000 for fiscal 1995,
primarily due to lower margins experienced by its gas marketing
operations.  Although margins were lower than 1995, EWR's average
margin is outstanding and sales volumes have increased 34%.  EWR
expenses were also higher than 1995 because of power marketing
investigations, salary and expenses for an EWR specific employee,
increased direct charges and overheads allocated to EWR from EWST
management in connection with efforts to enhance EWR operations. 

     For fiscal 1995, EWR net income was $427,000 compared to
$198,000 for fiscal 1994, primarily due to increased gas marketing
margins. In fiscal 1995, Energy West Resources' gross marketing
margin in gas trading activities increased approximately 148% to
approximately $738,000 from $298,000 in fiscal 1994.  This increase
in margins was partially offset by the effect of a $42,000 increase
to net income in Fiscal 1994 as a result from adoption of SFAS
No.109.

Montana Sun
     For fiscal 1996, Montana Sun's net income was approximately
$47,000 as compared to $51,000 for fiscal 1995.
     For fiscal 1995, Montana Sun's net income was $51,000 as
compared to $87,000 for fiscal 1994 which had the effect of an
accounting change, from adoption of SFAS No. 109.


                                8
***********************************************************************

Liquidity and Capital Resources
     The Company's operating capital needs, as well as dividend
payments and capital expenditures, are generally funded through cash
flow from operating activities, short-term borrowing and liquidation
of temporary cash investments.  Historically, to the extent cash flow
has not been sufficient to fund capital expenditures, the Company has
borrowed short-term or issued equity securities to fund capital
expansion projects or reduce short-term borrowing.

     The Company's short-term borrowing requirements vary according
to the seasonal nature of its sales and expense activity.  The
Company has greater need for short-term borrowing during periods when
internally generated funds are not sufficient to cover all capital
and operating requirements, including costs of gas purchases and
capital expenditures.  In general, the company's short-term borrowing
needs for purchases of gas inventory and capital expenditures are
greatest during the summer months and the Company's short-term
borrowing needs for financing of customer accounts receivable are
greatest during the winter months.  In addition during the past two
years, the Company has used short-term borrowing to finance the
acquisition of propane operations and LNG for West Yellowstone Gas. 
Short-term borrowing utilized for construction or property
acquisitions generally has been on an interim basis and converted to
long-term debt and equity when it becomes economical and feasible to
do so.

     At June 30, 1996, the Company had a $11,000,000 bank line of
credit, of which $7,175,000 had been borrowed under the credit
agreement.  The short-term borrowings bear interest at the rate of 8%
per annum as of June 30, 1996.

     The company generated net cash from operating activities for
fiscal 1996 of approximately $547,000 as compared to $3,605,000 for
fiscal 1995.  This change from fiscal 1995 is attributed to a
$106,000 decrease in net income, a $236,000 gain on sale-leaseback, a
reduction in accounts payable of approximately $1,000,000, an
increase in recoverable costs of gas purchases and prepaid gas of
approximately $1,627,000 and other miscellaneous working capital
changes of approximately $1,170,000 offset by approximately $491,000
increase in deferred income taxes, an increase in gas inventory of
approximately $470,000 and an increase in accounts receivable of
approximately $80,000.  Cash used in investing activities was
approximately $3,968,000 for fiscal 1996, as compared to $4,262,000
for fiscal 1995.  Capital expenditures for fiscal 1996 was
approximately $4,591,000, primarily due to system expansion in
Payson, Arizona and all other areas and continued expansion of the
West Yellowstone system.  Partially offsetting these capital
expenditures were proceeds received from a sale lease back in Payson,
Arizona of approximately $525,000, proceeds from the sale of
property, plant and equipment of $27,000 and proceeds from
contributions in aid of construction of approximately $63,000.



                                9
***********************************************************************

     The Company generated net cash from operating activities for
fiscal 1995 of approximately $3,605,000 as compared to $2,851,000 for
fiscal 1994.  This change from fiscal 1994 is attributed to a
$162,000 increase in net income, $249,000 increase in depreciation
and amortization, $92,000 cumulative effect of an accounting change
and other miscellaneous working capital changes, offset by
approximately $302,000 decrease in deferred income taxes.  Cash used
in investing activities was approximately $4,262,000 for fiscal 1995,
as compared to $1,817,000 for fiscal 1994.  Capital expenditures for
fiscal 1995 was approximately $4,700,000, primarily due to system
expansion in all areas and construction of the West Yellowstone
system.  Partially offsetting these capital expenditures were
proceeds received from a restricted deposit from the Series 1992A
bonds deposited in a construction fund, drawn for specific capital
projects in the Great Falls division of approximately $205,000,
proceeds from the sale of property, plant and equipment of $80,000,
proceeds from collection of long-term notes receivable of $79,000 and
proceeds from contributions in aid of construction of $81,000.

     Capital expenditures of the Company are primarily for expansion
and improvement of its gas utility properties.  To a lesser extent,
funds are also expended to meet the equipment needs of the Company's
operating subsidiaries and to meet the Company's administrative
needs.  The Company's capital expenditures were approximately $4.6
million in fiscal 1996 and approximately $4.7 million for fiscal 1995
and $2.6 million in fiscal 1994, including RMF's expenditures for the
acquisition of propane operations.  During fiscal 1996, approximately
$1.3 million has been expended for the construction of the natural
gas system in West Yellowstone, Montana and approximately $1 million
had been expended for gas system expansion projects for new
subdivisions in the Broken Bow division's service area and
approximately $350,000 for additions to the office and the east
storage site of Petrogas in Payson, Arizona.  Capital expenditures
are expected to be approximately $3.6 million  in fiscal 1997,
including approximately $1.4 million for continued expansion  for the
Broken Bow division, with the balance for maintenance and other
special system expansion projects in the Great Falls and Cody
divisions.  The Company continues to evaluate opportunities to expand
its existing businesses from time to time.  
   
     The major factors which will affect the Company's future
results include general and regional economic conditions, weather,
customer retention and growth, the ability to meet competitive
pressures and to contain costs, changes in the competitive
environment in the Company's non-regulated segment, the adequacy and
timeliness of rate relief, cost recovery and necessary regulatory
approvals, and continued access to capital markets.



                                10
***********************************************************************

     The regulatory structure which has historically embraced the
gas industry has been in the process of transition.  Legislative and
regulatory initiatives, at both the federal and state levels, are
designed to promote competition and will continue to impose
additional pressure on the Company's ability to retain customers and
to maintain current rate levels.  The changes in the gas industry
have allowed commercial and industrial customers to negotiate their
own gas purchases directly with producers or brokers.  To date, the
changes in the gas industry have not had a negative impact on
earnings or cash flow of the Company's regulated segment.

     The accounts and rates of the Company's regulated segment are
subject, in certain respects, to the requirements of the Montana,
Wyoming and Arizona public utilities commissions.  As a result, the
Company's regulated segment maintains its accounts in accordance with
the requirements of those regulators.  The application of generally
accepted accounting principles by the Company's regulated segments
differ in certain respects from application by the non-regulated
segment and other non-regulated businesses.  The regulated segment
prepares its financial statements in accordance with Statement of
Accounting Standards No. 71 --"Accounting for the Effects of Certain
Types of Regulation" (SFAS 71).  In general, SFAS 71 recognizes that
accounting for rate-regulated enterprises should reflect the
relationship of costs and revenues.  As a result, a regulated utility
may defer recognition of cost (a regulatory asset) or recognize an
obligation (a regulatory liability) if it is probable that, through
the rate-making process, there will be a corresponding increase or
decrease in revenues.  Accordingly, the Company has deferred certain
costs, which will be amortized over various periods of time.  The
costs deferred are further described in the Company's financial
statements and the notes thereto.  To the extent that collection of
such costs or payment of liabilities is no longer probable as a
result of changes in regulation and/or the Company's competitive
position, the associated regulatory asset or liability will be
reversed with a charge or credit to income.  If the Company's
regulated segment were to discontinue the application of SFAS 71, the
accounting impact would be an extraordinary, non-cash charge to
operations that could be material to the financial position and
results of operation of the Company.  However, the Company is unaware
of any circumstances or events in the foreseeable future that would
cause it to discontinue the application of SFAS 71.
    
     
     Information on the sources and uses of cash for the Company is
included in the Consolidated Statements of Cash Flows on page 22 of
the Company's 1996 Annual Report.

SEC Ratio of Earnings to Fixed Charges
     For the twelve months ended June 30, 1996, 1995 and 1994, the
Company's ratio of earnings to fixed charges was 2.42, 2.93 and 2.64
times, respectively.  Fixed charges include interest related to long-
term debt, short-term borrowing, certain lease obligations and other
current liabilities.


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Inflation
     Capital intensive businesses, such as the Company's natural gas
operations, are significantly affected by long-term inflation. 
Neither depreciation charges against earnings nor the rate-making
process reflect the replacement cost of utility plant. However, based
on past practices of regulators, these businesses will be allowed to
recover and earn on the actual cost of their investment in the
replacement or upgrade of plant.  Although prices for natural gas may
fluctuate, earnings are not impacted because gas cost tracking
procedures semi-annually balance gas costs collected from customers
with the costs of supplying natural gas. The Company believes that
the effects of inflation, at currently anticipated levels, will not
significantly affect results of operations.

Accounting for Income Taxes
     In February 1992 the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards "SFAS")
No. 109, "Accounting for Income Taxes." SFAS No.109 retains the
current requirement to record deferred income taxes for temporary
differences that are reported in different years for financial
reporting and tax purposes; however, the methodology for calculating
and recording deferred income taxes has changed.  Under the liability
method adopted by SFAS No. 109, deferred tax liabilities or assets
are computed using the tax rate that will be in effect when the
temporary differences reverse.  However, the changes in tax rates
applied to accumulated deferred income taxes may not be immediately
recognized in operating results by regulated companies because of
rate-making treatment and provisions in the Tax Reform Act of 1986. 
Effective July 1, 1993, the Company changed its method of accounting
for income taxes from the deferred method to the liability method
required by SFAS No. 109.  As permitted under the new rules, prior
year's financial statements have not been restated.  For regulated
operations, the cumulative effect of this change in accounting method
on July 1, 1993 resulted in the recording of a regulatory asset of
approximately $601,000 and a regulatory liability of approximately
$205,000.  For nonregulated operations, the cumulative effect of this
change in accounting method on July 1, 1993 was to increase net
income by approximately $92,000.
Postretirement Benefits Other Than Pensions
     The Company adopted, effective July 1, 1993, SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions."  This standard requires that the projected future cost of
providing postretirement benefits be recognized as an expense as
employees render service rather than when paid.  Effective for fiscal
year 1994, the Company modified its plan for these benefits and has
elected to pay eligible retirees (post 65 years of age) $125 per
month in lieu of contracting for health and life insurance benefits. 
The amount of this payment is fixed and will not increase with
medical trends or inflation.  The Company made a change to the plan,
effective July 1, 1996 allowing pre-65 retirees and their spouses to
remain on the same medical plan as active employees by contributing
125% of the current COBRA rate to retain this coverage.  The
increased liability from this change is $269,200.  The Company
expects regulators in Montana and Wyoming to allow recovery of the
additional costs associated with the plan change. The adoption of
SFAS No. 106 did not have a significant effect upon results of
operations.  See Note 4 to the Consolidated Financial Statement for
additional information.




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Environmental Issues
     The Company owns property on which it operated a manufactured
gas plant from 1909 to 1928.  The site is currently used as a service
center and to store certain equipment and materials and supplies. 
The coal gasification process utilized in the plant resulted in the
production of certain by-products which have been classified by the
federal government and the state of Montana as hazardous to the
environment.  After management became aware of the potential of
contamination on this site, it initiated an assessment of the
property through the assistance of a qualified consulting firm.  That
assessment revealed the presence of certain hazardous material in
quantities exceeding tolerances established for such material by
regulatory authorities.  After making required notifications of that
condition to federal and state regulatory authorities, a report
summarizing the assessment was filed with the State of Montana
Department of Health and Environment Science (MDHES).  Subsequent to
that submittal a meeting was held with a representative of the MDHES
wherein a process was agreed upon to arrive at appropriate
remediation of the site.  
   
The costs incurred by the Company to date
approximate $320,000 and have been capitalized as other deferred
charges.  Until further work is done regarding remediation
alternative, no further estimate of the costs of remediation can be
made.  However, management believes that regardless of the
alternative selected, the costs incurred will not materially affect
the Company's results of operations and net cash flows.
    
     

     The Company received formal approval from MPSC to recover the
costs associated with the cleanup of this site.  The Company has
begun recovery of costs incurred at June 30, 1995 over two years
through a surcharge in billing rates effective July 1, 1995. The
total of recoveries collected through June 30, 1996 is $214,000.
Management intends to request that future costs be recovered over a
similar time period. However, the Company cannot give assurance that
such costs will be recovered in that regulatory process. 



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Subsequent Event
     In August, 1995, the Company announced that it had signed a
letter of intent and a definitive agreement to purchase the assets of
Jackson Vangas in Jackson, Wyoming, for approximately $1,000,000,
from Quantum Chemical (Suburban Propane Division) of Whippany, New
Jersey.  Jackson Vangas operates a propane vapor system which serves
approximately 500 customers in and around Jackson, Wyoming, a city of
approximately 5,000 people.  In December, 1995, the Wyoming Public
Service Commission granted a natural gas franchise to a competing
utility, which now serves electricity in the Jackson Hole area. Since
the definitive agreement is contingent upon the approval of the
Wyoming Public Service Commission to grant ENERGY WEST a natural gas
franchise to serve the Jackson Hole area, that agreement has now
become nullified.  The costs of the Jackson project were written off
through March 31, 1996 of approximately $113,000, which reduced
earnings by approximately $.03 per share.  

     In June, 1996, the Great Falls division filed a rate adjustment
application with the Montana Public Service Commission of
approximately $386,000, to recover increased gas supply costs, as
part of an annual filing made by the Great Falls division to balance
gas supply costs against gas revenues.  This filing does not increase
the Great Falls division's margins.

     In July, 1996, the Great Falls division file a general rate
increase with the Montana Public Service Commission for approximately
$963,000, which reflects increased operating, maintenance and
depreciation costs as well as a change in the cost of capital.  The
Great Falls division has applied for interim rate relief of
approximately $530,000 and the division expects interim relief no
later than November, 1996.  If the Montana Public Service Commission
approves the Great Falls division's rate filing, the impact of rate
relief would increase earnings per share on an annual basis of
approximately $.26 per share and would increase Fiscal 1997 earnings
by approximately $.07 per share. The Rate Hearing will be held in
late Fiscal 1997.


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