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                                   CREDIT AGREEMENT


    THIS CREDIT AGREEMENT is dated as of the 18th day of January, 1995, and is
by and between ENERGY WEST, INCORPORATED, formerly known as Great Falls Gas
Company, of P.O. Box 2229, No. 1 River Park Tower, Great Falls, MT 59403-2229
(the "Borrower"), and NORWEST BANK GREAT FALLS, NATIONAL ASSOCIATION, a national
banking association with offices located at 21 Third Street North, P.O. Box
5011, Great Falls, Montana 59403-8200 (the "Bank").

                                      RECITALS:

         WHEREAS, Borrower desires to obtain a committed revolving credit line
in the principal amount of EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00) for
its own working capital purposes and to fund the working capital needs of
certain of its Subsidiaries; and,

         WHEREAS, Borrower desires the Bank to continue to consider making zero
interest rate commercial loans to certain of Borrower's customers (the "Customer
Loans") in an aggregate amount not to exceed TWO MILLION ONE HUNDRED THOUSAND
AND NO/100 DOLLARS ($2,100,000.00);

         WHEREAS, the Borrower desires the Bank to make certain
Borrower-guaranteed zero interest loans or CLIP Loans to customers whose
requests have been previously rejected by the Bank (the "Guaranteed Loans"), in
an aggregate amount outstanding not to exceed ONE HUNDRED THOUSAND AND NO/100
DOLLARS ($100,000.00) at any time outstanding.

         WHEREAS, the Borrower desires to obtain a stand-by letter of credit
facility from the Bank in the amount of ONE MILLION AND NO/100 DOLLARS
(1,000,000.00);

         WHEREAS, the Bank is willing to make the Credit and the Stand-By
Letter of Credit available to the Borrower, to continue consideration of
Customer Loans and to make available the Guaranteed Loans subject to the
provisions of this Credit Agreement;

    NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the parties agree as follows:

1.  Definitions

In addition to those terms defined in the above recitals, as used herein:

    1.1.    "Agreement" shall mean this Credit Agreement and all amendments and
            supplements hereto which may from time to time become effective
            hereafter in accordance with the terms hereof.

    1.2.    "Banking Day" shall mean a day on which banks are generally open
            for business in Great Falls, Montana.

    1.3.    "Base Rate" shall mean the "base" or "prime" rate of interest as
            announced by Norwest Bank Minnesota, National Association, as in
            effect from time to time.

    1.4.    "Borrowed Money" shall mean funds obtained by incurring contractual
            indebtedness and shall not include trade accounts payable or money
            borrowed from the Bank.

    1.5.    "Closing Date" shall mean the date on which funds are advanced
            under the Credit.

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    1.6.    "Credit" shall mean the revolving credit line established hereby
            for Borrower, which shall not in any event exceed the aggregate
            principal amount of EIGHT MILLION AND NO/100 DOLLARS
            ($8,000,000.00) outstanding at any one time.

    1.7.    "Default" shall mean an Event of Default as referred to in Section
            7 hereof, or an event which with notice or lapse of time or both
            would become an Event of Default.

    1.8.    "Generally Accepted Accounting Principles" shall mean generally
            accepted accounting principles applied on a basis consistent with
            those reflected in the financial statements referred to in Section
            4.5 hereof.

    1.9.    "Event of Default" shall mean any and all events of default
            described in Section 7 hereof.

    1.10.   "Maturity Date" shall mean January 15, 1996.

    1.11.   "Note" shall mean the promissory note of the Borrower substantially
            in the form of attached Exhibit A, evidencing borrowings under 
            Section 2.1 hereof.

    1.12.   "Permitted Liens" shall mean:

            1.12.1.   Liens in favor of the Bank;

            1.12.2.   Existing liens disclosed to the Bank in writing prior to
                      the date of this Agreement; and,

            1.12.3.   Liens for taxes not delinquent or which Borrower is
                      contesting in good faith.

    1.13.   "Stand-By Letter of Credit Line" shall mean the letter or letters
            of credit issued under the letter of credit application and
            agreement executed by Borrower in accordance with section 2.6 of
            this Agreement, which shall be in form and substance as Exhibit C
            attached hereto and incorporated herein, and which must not exceed
            ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) outstanding at any
            one time.

    1.14.   "Subsidiary" shall mean any corporation of which more than fifty
            percent (50%) of the outstanding voting securities shall, at the
            time of determination, be owned directly, or indirectly through one
            or more intermediaries, by either Borrower.

    1.15.   "Tangible Net Worth" shall mean the sum of the par or stated value
            of all outstanding capital stock, surplus and undivided profits of
            the Borrower, less any amounts attributable to treasury stock, good
            will, patents, copyrights, mailing lists, catalogues, trademarks,
            bond discount and underwriting expenses, organization expenses and
            other like intangibles (not including prepaid expenses classified
            as current assets or intangible assets offset by equal related
            liabilities), excluding also Subchapter S earnings unless such
            earnings are converted to Note and subordinated to bank debt or the
            Bank is given written confirmation, in form acceptable to the Bank,
            that such earnings are being retained as equity capital, all as
            determined in accordance with generally accepted accounting
            principles.

2.  The Loan

    2.1.    The Bank agrees to lend to Borrower from time to time from the
            effective date hereof until the Maturity Date sums not to exceed
            EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00) in aggregate
            principal amount at any one time outstanding.  Each


                                     Page 2 of 9

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            borrowing under this Section 2.1. will be requested in writing or
            in person by an authorized officer of Borrower, or telephonic ally
            by any person reasonably believed by the Bank to be an authorized
            officer of Borrower.  Each borrowing under this Section 2.1. will
            be evidenced by a notation on the Bank's records, which shall be
            conclusive evidence of such borrowing, and by the Note.  Within the
            limits of the Credit and subject to the terms and conditions
            hereof, Borrower may borrow, prepay pursuant to Section 2.5 hereof
            and reborrow pursuant to this Section 2.1.

    2.2.    Interest on the unpaid principal of the Note shall be calculated at
            an annual rate of ONE QUARTER OF ONE percent (1/4%) less than the
            Base Rate in effect from time to time on the basis of the actual
            number of days elapsed in a year of 360 days.  Each change in the
            Base Rate shall take effect on the first day of the month
            immediately succeeding such change.

    2.3.    Interest on the Note shall be payable on demand but, until such
            demand is made, monthly, commencing February 1, 1995, and
            continuing on the first day of each succeeding month until the Note
            is paid.

    2.4.    The principal of the Note will be due and payable on the Maturity
            Date.

    2.5.    The Borrower may at any time prepay the Note in whole or from time
            to time in part without premium or penalty.

    2.6.    The Bank shall issue stand-by letters of credit to Enron Risk
            Management Services Corporation for the account of Borrower, in an
            aggregate amount not to exceed ONE MILLION AND NO/100 DOLLARS.  The
            Stand-By Letter of Credit shall expire on December 27, 1995. 
            Borrower shall execute an application, agreement and promissory
            note for standby letters of credit (Exhibit B), on standard Norwest
            forms as required by the Bank.

    2.7.    Fees on the Stand-By Letter of Credit Line shall be calculated at a
            rate of 1.5% of the amount issued under the Stand-By Letter of
            Credit on the basis of the actual number of days elapsed in a year
            of 360 days.  Borrower shall also pay all additional fees assessed
            by Bank in connection with the Stand-By Letter of Credit Line,
            issuance of letters of credit or any amendments or modifications of
            the Stand-By Letter of Credit Line or letters or credit issued
            under the Stand-By Letter of Credit Line.

    2.8.    Interest on the Stand-By Letter of Credit Line shall be payable on
            demand but, until such demand is made, monthly, commencing February
            1, 1995, and continuing on the first day of each succeeding month
            until the Note is paid.

    2.9.    In addition, the Bank shall continue to consider making Customer
            Loans for the purpose of funding purchases of energy conservation
            devices, provided, however, that no such Customer Loan shall be in
            an amount in excess of ONE THOUSAND FIVE HUNDRED AND NO/100 DOLLARS
            ($1,500.00) per household or per unit of an apartment building,
            shall not exceed a term of five (5) years and shall require a
            minimum payment of $25.00 per month, and the aggregate outstanding
            of all Customer Loans shall not at any time exceed TWO MILLION ONE
            HUNDRED THOUSAND AND NO/100 DOLLARS ($2,100,000.00).  Applications
            for Customer Loans shall be subjected to the Bank's customary credit
            review policies.

    2.10.   The interest rate to obligors on the Customer Loans and the
            Guaranteed Loans shall be 0%.  Borrower, however, shall reimburse
            the Bank for all expenses incurred in the


                                     Page 3 of 9

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            making of such loans and, in addition, shall pay to the Bank
            interest at an annual rate equal to TWO AND ONE-HALF percent 
            (2 1/2%) in excess of the Base Rate.

    2.11.   In addition, Borrower shall, on the last day of each month, pay to
            Bank for each Customer Loan and/or Guaranteed Loan made by the
            Bank: an origination fee of $5.00, a monthly servicing fee of
            $0.40, and a delinquency fee, where incurred, of $1.00 for each
            payment past due for 30 days or less and $5.00 for each payment
            past due more than 30 days.

3.  Conditions Precedent

    3.1.    The Borrower shall deliver the following to the Bank on or before
            the Closing Date:

            3.1.1.    The Note, duly executed by Borrower;

            3.1.2.    A copy, certified as of the most recent date practicable
                      by the Secretary of State of Montana of Borrower's
                      certificate of incorporation, together with a certificate
                      of Borrower's corporate secretary to the effect that such
                      certificate of incorporation has not been amended since
                      the date of the aforesaid certification;

            3.1.3.    Certificates, as of the most recent dates practicable, of
                      the Secretary of State of Montana and the secretary of
                      state of each state in which Borrower is qualified as a
                      foreign corporation, as to the good standing of Borrower;

            3.1.4.    A certified copy of Borrower's filed Articles of
                      Incorporation and By-laws;

            3.1.5.    A certified copy of resolutions of Borrower's board of
                      directors authorizing the execution, delivery and
                      performance of this Agreement, the Note, the leter of
                      credit application and agreement, and each other document
                      to be delivered pursuant hereto; and,

            3.1.6.    A certificate of Borrower's corporate secretary as to the
                      incumbency and signatures of the officers of Borrower
                      signing this Agreement, the Note, the leter of credit
                      application and agreement and each other document to be
                      delivered pursuant hereto.

    3.2.    The Bank shall not be obligated to lend hereunder on the occasion
            for any borrowing unless:

            3.2.1.    The representations and warranties contained in Section 5
                      hereof are true and accurate on and as of such date; and,

            3.2.2.    No Event of Default, and no event which might become an
                      Event of Default after the lapse of time or the giving of
                      notice and the lapse of time, has occurred and is
                      continuing or will exist upon the disbursement of such
                      loan.

4.  Representations and Warranties

To induce the Bank to enter into this Agreement, the Borrower represents and
warrants to the Bank as follows:

    4.1.    Borrower is a corporation duly organized, existing and in good
            standing under the laws of the State of Montana.


                                     Page 4 of 9

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    4.2.    The execution, delivery and performance of this Agreement and the
            Note by the Borrower are within their corporate powers, have been
            duly authorized, and are not in contravention of law, or the terms
            of either Borrower's Articles of Incorporation or By-Laws or of any
            undertaking to which either Borrower is a party or by which it is
            bound.

    4.3.    The property of the Borrower is not subject to any lien except
            Permitted Liens.

    4.4.    No litigation or governmental proceeding is pending or, to the
            knowledge of the officers of Borrower, threatened against Borrower
            which could have a material adverse effect on Borrower's financial
            condition or business.

    4.5.    The consolidated financial statements of Borrower and its
            Subsidiaries for the fiscal year ending June 30, 1994, prepared by
            certified public accountants, and for the period ending November 30,
            1994, prepared by the Borrower, copies of which financial
            statements have been furnished to the Bank, are complete and
            accurate in all respects and present fairly the financial condition
            of the Borrower and its Subsidiaries as of such dates, and the
            results of their operations for the periods covered thereby in
            accordance with Generally Accepted Accounting Principles, and there
            have been no material adverse changes in the consolidated financial
            condition or business of the Borrower from November 30, 1994, to
            the date hereof.

5.  Affirmative Covenants

Borrower covenants and agrees that so long as any indebtedness remains
outstanding hereunder, unless the Bank shall otherwise consent in writing, it
will:

    5.1.    Pay, when due, all taxes assessed against it or its property except
            to the extent and so long as contested in good faith.

    5.2.    Maintain its corporate existence and comply with all laws and
            regulations applicable thereto.

    5.3.    Furnish to the Bank:

            5.3.1.    Within 150 days after the end of each fiscal year of the
                      Borrower (i) a detailed, consolidated and consolidating
                      report of audit of the Borrower and their Subsidiaries
                      for such fiscal year including the balance sheet of the
                      Borrower and their Subsidiaries as of the end of such
                      fiscal year and the statements of profit and loss and
                      surplus of the Borrower and their Subsidiaries for the
                      fiscal year then ended, prepared by independent certified
                      public accountants satisfactory to the Bank, and (ii) a
                      certificate of such accountants stating whether, in
                      making their audit, they have become aware of any Event
                      of Default set forth in Section 7 hereof, or of any event
                      which might become an Event of Default after the lapse of
                      time or the giving of notice and the lapse of time, which
                      has occurred and is then continuing and, if any such
                      event has occurred and is continuing, specifying the
                      nature and period of existence thereof.

            5.3.2.    Within 45 days after the end of each month, (i) the
                      balance sheet of the Borrower as of the end of such
                      month, and (ii) the statement of profit and loss and
                      surplus of the Borrower from the beginning of such fiscal
                      year to the end of such month in a form acceptable to
                      Bank.  All of the foregoing shall be


                                     Page 5 of 9

<PAGE>

                      unaudited, but certified as correct (subject to year end
                      adjustments) by an appropriate officer of the Borrower.

            5.3.3.    Promptly upon knowledge thereof, notice to the Bank in
                      writing of the occurrence of any event which has or
                      might, after the lapse of time or the giving of notice
                      and the lapse of time, become an Event of Default under
                      Section 7 hereof.

            5.3.4.    Promptly, such other information as the Bank may
                      reasonably request.

    5.4.    Cause its properties of an insurable nature to be adequately
            insured by reputable and solvent insurance companies against loss
            or damages customarily insured against by persons operating similar
            properties, and similarly situated, and carry such other insurance
            (including business interruption insurance) as usually carried by
            persons engaged in the same or similar businesses and similarly
            situated.

    5.5.    Keep true, complete and accurate books, records and accounts in
            accordance with Generally Accepted Accounting Principles
            consistently applied.

6.  Negative Covenants

Without the Bank's written consent, which the Bank will not unreasonably
withhold, so long as any indebtedness remains outstanding under the Credit,
Borrower will:

    6.1.    Permit any lien including, without limitation, any pledge,
            assignment, mortgage, title retaining contract or other type of
            security interest to exist on its property, real or personal,
            except Permitted Liens.

    6.2.    Enter into any transaction of merger or consolidation, or transfer,
            sell, assign, lease or otherwise dispose of (other than sales in
            the ordinary course of business) all or a substantial part of its
            properties or assets, or any of its promissory notes or accounts
            receivable, or any stock (other than directors qualifying shares)
            or any assets or properties necessary or desirable for the proper
            conduct of its business, or change the nature of its business, or
            wind up, liquidate or dissolve, or agree to do any of the
            foregoing.

    6.3.    Create, incur, assume or suffer to exist, contingently or
            otherwise, other than in the ordinary course of business for
            conducting its present business operation, indebtedness for
            Borrowed Money, except: (i) indebtedness arising from issuance of
            bonds; (ii) indebtedness arising under this Agreement; (iii)
            indebtedness disclosed to the Bank in writing as existing at the
            time of execution of this Agreement; and (iv) indebtedness incurred
            in connection with the Energy West purchase of Wyo-LP, Broken Bow
            Gas Company and Petrogas.

    6.4.    Become or remain a guarantor or surety, or pledge its credit or
            become liable in any manner (except by endorsement for deposit in
            the ordinary course of business, and except for the Guaranteed
            Loans, as defined herein) on undertakings of another.

    6.5.    Purchase or otherwise acquire all or substantially all of the
            assets of any person, firm, corporation or association unless after
            the consummation of such transaction, and after giving effect
            thereto and to any concurrent transactions, no Event of Default
            specified in Section 7 hereof, and no event which with notice or
            lapse of time or both would become such an Event of Default would
            exist.


                                     Page 6 of 9


<PAGE>

    6.6.    Permit the ratio of its Debt to Tangible Net Worth at fiscal year
            end to be more than 3.0 to 1.0.

7.  Events of Default

    7.1.    Upon the occurrence of any of the following Events of Default:

            7.1.1.    Default in any payment of interest or of principal on the
                      Note when due, and continuance thereof for 15 calendar
                      days;

            7.1.2.    Default in the observance or performance of any other
                      agreement of Borrower or any Subsidiary thereof set forth
                      herein and continuance thereof for 30 days;

            7.1.3.    Default by Borrower or any Subsidiary thereof in the
                      payment of any other indebtedness for Borrowed Money or
                      in the observance or performance of any term, covenant or
                      agreement of Borrower or any Subsidiary thereof in any
                      agreement relating to any indebtedness of Borrower or
                      Subsidiary, the effect of which default is to permit the
                      holder of such indebtedness to declare the same due prior
                      to the date fixed for its payment under the terms
                      thereof;

            7.1.4.    Any representation or warranty made by Borrower herein,
                      or in any statement or certificate furnished by Borrower
                      hereunder, is untrue in any material respect; or,

            7.1.5.    The occurrence of any litigation or governmental
                      proceeding which is pending or threatened against
                      Borrower or any Subsidiary thereof, which, in the
                      reasonable opinion of Borrower's legal counsel, could
                      have a material adverse effect on Borrower's or such
                      Subsidiary's financial condition or business, and which
                      is not remedied within a reasonable period of time (a
                      reasonable period of time not to exceed 10 days) after
                      notice thereof to the Borrower;

    then, or at any time thereafter, unless such Event of Default is remedied,
    the Bank or the holder of the Note may, by notice in writing to the
    Borrower, terminate the Credit or declare the Note to be due and payable,
    or both, whereupon the Credit shall terminate forthwith or the Note shall
    immediately become due and payable, or both, as the case may be.

    7.2.    Upon the occurrence of any of the following Events of Default:

            Borrower or any Subsidiary thereof becomes insolvent or bankrupt,
            or makes an appointment for the benefit of creditors or consents to
            the appointment of a custodian, trustee or receiver for itself or
            for the greater part of its properties; or a custodian, trustee or
            receiver is appointed for Borrower or any Subsidiary thereof, or
            for the greater part of its properties without its consent and is
            not discharged within 30 days; or bankruptcy, reorganization or
            liquidation proceedings are instituted by or against Borrower or
            Subsidiary and, if instituted against it, are consented to by it or
            remain undismissed for 30 days;

    then the Credits shall automatically terminate and the Note shall
    automatically become immediately due and payable, without notice.

8.  Miscellaneous

    8.1.    The provisions of this Agreement shall be in addition to those of
            any guaranty, pledge or security agreement, note or other evidence
            of liability held by the Bank, all of which



                                     Page 7 of 9

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            shall be construed as complementary to each other.  Nothing herein
            contained shall prevent the Bank from enforcing any or all other
            Notes, guaranties, pledges or security agreements in accordance
            with their respective terms.

    8.2.    From time to time, the Borrower will execute and deliver to the
            Bank such additional documents and will provide such additional
            information as the Bank may reasonably require to carry out the
            terms of this Agreement and be informed of the Borrower's status
            and affairs.

    8.3.    The Borrower will pay all expenses, including the reasonable fees
            and expenses of legal counsel for the Bank, incurred in connection
            with the preparation, administration, amendment, modification or
            enforcement of this Agreement, and the collection or attempted
            collection of the Note.

    8.4.    Any notices or consents required or permitted by this Agreement
            shall be in writing and shall be deemed delivered if delivered in
            person or if sent by certified mail, postage prepaid, return
            receipt requested, or telegraph, as follows, unless such address is
            changed by written notice hereunder:

    8.4.1.  If to the Borrower:   Energy West, Incorporated
                                  P.O. Box 2229
                                  No. 1 River Park Towers
                                  Great Falls, MT 59403-2229

                                  Attention: Larry D. Geske, President and CEO
                                             William J. Quast, Vice President
                                             Treasurer and Comptroller
                                             Edward J. Bernica, Vice President
                                             and CFO

            8.4.2.    If to the Bank:

                                  Norwest Bank Great Falls, National
                                  Association
                                  21 3rd Street North
                                  Great Falls, MT 59403

                                  Attention: John Koslosky, Vice President

    8.5.    The substantive Laws of the State of Montana shall govern the
            construction of this Agreement and the rights and remedies of the
            parties hereto.

    8.6.    This Agreement shall inure to the benefit of, and shall be binding
            upon, the respective successors and permitted assigns of the
            parties hereto.  The Borrower has no right to assign any of their
            rights or obligations hereunder without the prior written consent
            of the Bank.  This Agreement, and the documents executed and
            delivered pursuant hereto, constitute the entire agreement between
            the parties, and may be amended only by a writing signed on behalf
            of each party.

    8.7.    If any provision of this Agreement shall be held invalid under any
            applicable Laws, such invalidity shall not affect any other
            provision of this Agreement that can be given effect without the
            invalid provision, and, to this end, the provisions hereof are
            severable.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.



                                     Page 8 of 9

<PAGE>

ENERGY WEST, INCORPORATED                   NORWEST BANK GREAT FALLS,
                                            NATIONAL ASSOCIATION


By: /s/ Larry D. Geske                      By: /s/ John Koslosky
   ----------------------------------           --------------------------------
   Larry D. Geske, President and CEO              John Koslosky, Vice President


By: /s/ William J. Quast
   ----------------------------------
    William J. Quast, Vice President,
    Treasurer and Controller









                                     Page 9 of 9