PROMISSORY NOTE


ENERGY WEST, INCORPORATED                                       NOVEMBER 7, 1996

On March 15, 1997, for value received, the undersigned promises to pay to the
order of Norwest Bank Montana, National Association (the "Bank") at 21 Third
Street North, Great Falls, MT  59403-8200, or at any other place designated at
any time by the holder hereof, in lawful money of the United States of America,
the principal sum of THIRTEEN MILLION AND NO/100 DOLLARS ($13,000,000.00), or
so much thereof as is disbursed and remains outstanding hereunder on the due
date hereof, as shown by the Bank's liability record, together with interest
(calculated on the basis of actual days elapsed in a 360-day year) on the 
unpaid balance hereof from the date hereof until this Note is fully paid,
payable at the times and calculated at the rate or rates as follow:

     The Borrower shall pay interest monthly on the unpaid principal amount of
     the Credit, at a rate per annum equal to ONE-FOURTH OF ONE percent (1/4%)
     less than the Base Rate, commencing December 1, 1996, and continuing on the
     same day of each succeeding month until March 15, 1997, when the entire
     remaining balance of principal and interest shall be immediately due and
     payable.  The foregoing notwithstanding, Borrower shall have the option, in
     $1,000,000.00 minimum increments, to fix interest rates for 30, 60 or 90
     day periods at 250 basis points over the LIBOR for such period.  "Base
     Rate" means the rate of interest established by the Norwest Bank Minnesota,
     National Association, from time to time as its "base" or "prime" rate of
     interest and shall be subject to change as often as monthly, with each such
     change to take effect as of the first day of the immediately succeeding
     month.  "LIBOR" means the average (rounded upward, if necessary, to the
     nearest one-eighth of one percent) of offered rates for dollar deposits 
     in immediately available funds in the London market based on quotations 
     at five major banks for a period, and in an amount, comparable to the
     interest period and principal amount of the portion of the loan for which
     the LIBOR option has been chosen, as such rates are published from time to
     time in the Money Rates section of the Wall Street Journal.

This note shall be subject to additional terms and conditions included in that
certain Credit Agreement, dated January 18, 1995, and all amendments thereto
(collectively, the "Agreement"), between the Bank or its successor in interest,
and the undersigned.  The terms and conditions of the Agreement are incorporated
herein by reference.  In the event that any provision in the Agreement is found
to be in conflict with any provision of this Note, the provision in the
Agreement shall control.

ENERGY WEST, INCORPORATED

By:  /s/ Edward J. Bernica
     -------------------------------------------
     Edward J. Bernica, Vice President & CFO


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