**EXHIBIT 12**

 

**CASCADE NATURAL GAS CORPORATION**

**COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES**

**AND PREFERRED DIVIDEND REQUIREMENTS**

 
| ** **                            | ** ** | ** **                 | ** ** | **Twelve Months Ended** | ** ** | ** **    | ** ** |
|---------------------------------------|------------|----------------------------|------------|-------------------------|------------|---------------|------------|
| ** **                            | ** ** | **31-Dec-05**              | ** ** | **30-Sep-05**           | ** ** | **30-Sep-04** | ** ** | **30-Sep-03** | ** ** | **30-Sep-02** | ** ** | **30-Sep-01** | ** ** |
| ** **                            | ** ** | **(dollars in thousands)** | ** ** |
| Fixed charges, as defined:            |       |                       |       |                    |       |          |       |   |   |   |   |   |   |
| Interest expense                      |       | $                          | 11,793     |                    | $          | 11,744        |       | $ | 12,375 |   | $ | 12,363 |   | $ | 12,384 |   | $ | 10,509 |   |
| Amortization of debt issuance expense |       | 388                        |       | 372                     |       | 618           |       | 696 |   | 652 |   | 607 |   |
|                                  |       |                       |       |                    |       |          |       |   |   |   |   |   |   |
| Total fixed charges                   |       | $                          | 12,181     |                    | $          | 12,116        |       | $ | 12,993 |   | $ | 13,059 |   | $ | 13,036 |   | $ | 11,116 |   |
|                                  |       |                       |       |                    |       |          |       |   |   |   |   |   |   |
| Earnings, as defined:                 |       |                       |       |                    |       |          |       |   |   |   |   |   |   |
| Net income                            |       | $                          | 10,655     |                    | $          | 9,247         |       | $ | 13,302 |   | $ | 8,720 |   | $ | 10,458 |   | $ | 16,994 |   |
| Add (deduct):                         |       |                       |       |                    |       |          |       |   |   |   |   |   |   |
| Income taxes                          |       | 6,557                      |       | 5,632                   |       | 7,559         |       | 5,117 |   | 6,085 |   | 9,520 |   |
| Fixed charges                         |       | 12,181                     |       | 12,116                  |       | 12,993        |       | 13,059 |   | 13,036 |   | 11,116 |   |
|                                  |       |                       |       |                    |       |          |       |   |   |   |   |   |   |
| Total earnings                        |       | $                          | 29,393     |                    | $          | 26,995        |       | $ | 33,854 |   | $ | 26,896 |   | $ | 29,579 |   | $ | 37,630 |   |
| Ratio of earnings to fixed charges    |       | 2.41                       |       | 2.23                    |       | 2.61          |       | 2.06 |   | 2.27 |   | 3.39 |   |

 

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