Gas Furnace vs. Heat Pump: Which Costs Less to Run in Washington?
A lower gas bill does not necessarily mean lower heating costs after switching to a heat pump. The electric bill changes too. To compare gas furnace vs heat pump costs fairly, start with the price of energy and the amount of useful heat each system produces.
For Washington homeowners, the answer can change across utility boundaries. A Tacoma Power customer and a household buying PSE electricity can reach different conclusions about the same equipment. Here is a practical comparison using residential rates checked on September 29, 2026.
Use the whole energy rate
PSE’s May 1, 2026 electric summary, Schedule 7, lists total variable charges of $0.187465/kWh for the first 600 kWh and $0.206882/kWh above 600 kWh, plus a $7.49 monthly basic charge for single-phase service. Those totals include the listed riders and credits; using only the base energy charge understates the cost.
PSE’s September 1, 2026 gas summary, Schedule 23, totals $1.58324 per therm. It also shows a $14 monthly basic charge and a separate $3.72 monthly CCA customer benefit. Municipal tax adjustments are excluded from these PSE figures.
Tacoma Power’s Schedule A-1, effective April 1, 2026, combines $0.045351/kWh for energy and $0.046295/kWh for delivery: $0.091646/kWh. The standard individual-meter customer charge is $31.30 monthly. University Place has different listed rates; check the address-specific schedule.
These are dated examples, not statewide prices. Use your actual provider, service plan, and taxes. PSE time-of-use customers need an hourly comparison. PSE also lists requested October 1 rate adjustments; recheck approved rates before making a winter budget.
Compare equal amounts of useful heat
The U.S. Energy Information Administration gives 100,000 Btu per therm and 3,412 Btu per kWh. That lets us compare the energy cost of producing one million Btu of heat, rather than comparing a therm directly with a kWh.
A furnace rated 95% AFUE converts about 95% of its fuel energy into heat over the rating cycle. A heat pump operating at COP 3 provides three units of heat per unit of electricity. PNNL explains these measures, including that AFUE excludes fan-control electricity. COP changes with conditions; the values below are assumptions, not promises for a particular model.
For one million Btu of equipment heat output, gas cost is 10 × dollars per therm ÷ AFUE, using 0.95 for 95%. Heat-pump cost is 293.08 × dollars per kWh ÷ COP. Resistance heat uses COP 1. The table excludes duct losses, furnace blower electricity, fixed charges, additional local taxes, maintenance, and installation. Heat-pump COP should represent the complete system’s electrical input.
| Heating option | PSE electric + PSE gas | Tacoma Power + PSE gas |
|---|---|---|
| Gas furnace, 95% AFUE | $16.67 | $16.67 |
| Gas furnace, 80% AFUE | $19.79 | $19.79 |
| Heat pump, COP 2 | $30.32 | $13.43 |
| Heat pump, COP 3 | $20.21 | $8.95 |
| Heat pump, COP 4 | $15.16 | $6.71 |
| Electric resistance, COP 1 | $60.63 | $26.86 |
The PSE column assumes household use has already filled the 600-kWh lower tier, so additional heating uses the higher rate. Both gas rows assume PSE gas service. This is a marginal heating-cost comparison, not a complete monthly bill.
What the numbers mean at home
In this example, a COP-3 heat pump costs more for energy than a 95%-AFUE furnace with PSE electricity, but less with Tacoma Power. At COP 4, it costs less in both columns. Resistance heat is the most expensive option shown. That is why “electric heat” is too broad a description for budgeting.
Actual heat-pump performance needs a seasonal estimate that includes cold weather, defrost, and backup heat. A mild-day COP cannot represent the entire winter. Likewise, an older furnace’s condition and the home’s duct losses can change real results. For equipment-selection questions, our heat pump versus gas furnace guide covers the broader choice.
Dual fuel needs a calculated changeover
A compatible dual-fuel system uses a heat pump and a gas furnace. The approximate energy-price break-even COP is 29.308 × electricity price × furnace efficiency ÷ gas price. With the rates above and 95% AFUE, it is about 3.64 for PSE’s higher tier and 1.61 for Tacoma Power.
Above that COP, heat-pump energy is cheaper under these assumptions; below it, gas is cheaper. This is not a universal outdoor-temperature setting. A technician must also account for heating capacity, approved controls, and the equipment’s performance data.
For a simple mixed example, suppose a heat pump supplies 80% of the heat at COP 4 and a 95%-AFUE furnace supplies 20%. Energy costs average about $15.46 per million Btu with PSE electricity or $8.71 with Tacoma Power. Those percentages describe heat delivered, not operating hours, and are illustrative rather than a forecast.
Keep monthly fees and installation separate
Electric customer charges generally remain because the home still needs electricity. Gas account charges also remain when a water heater, fireplace, or backup furnace keeps gas service active. Do not count the entire gas basic charge as savings unless service actually ends. The current CCA benefit is separate from per-therm savings and should not be assumed permanent; confirm all applicable account charges with PSE.
Installation is another budget: equipment, ducts, electrical work, permits, controls, and any needed gas-service changes. Cooling capability and an existing furnace’s remaining life also matter. A lower operating cost alone cannot establish payback. Compare budget and premium heat pumps using complete installation scopes.
For a Seattle, Tacoma, King County, or Pierce County home, bring recent utility bills and equipment information to the comparison. MACLAF can discuss heating and cooling options around your house and priorities. Contact MACLAF to plan the next step with the numbers that apply to you.