Heat Pump Operating Cost: Therms to kWh Worksheet

A gas bill that says 780 therms for the year is not a heating bill. Some of those therms burned in July, when the furnace was off and the water heater was not, and every one of them will go on burning after the furnace is gone.

That is where most heat pump running-cost comparisons quietly go wrong. The unit conversion is the easy half, and it is the half everybody does. The hard half is knowing how many therms belong to the furnace, and what the next kilowatt-hour costs in the month you would be buying thousands of them.

Below is the worksheet, worked all the way to an annual dollar figure on one utility's published sheets.

Your gas meter has more than one customer

Pull twelve months of therms from your utility's account portal, not the dollar amounts. Dollars move with the commodity and with the weather; therms are the measurement.

Then take the three lowest months, which in most of the country are July, August and September, and average them. That average is the non-heating baseline: water heating, cooking, a gas dryer, the standing pilot on anything old enough to have one. Multiply it by twelve, subtract it from the annual total, and the remainder is the space-heating share.

A  annual therms                 780
B  average of 3 lowest months      18
C  non-heating therms  = B x 12   216
D  heating therms      = A - C    564

Three months, not one. A single summer month gets used as the baseline more often than it deserves, usually because it is the smallest number on the chart and the smallest number produces the largest heating share. Four things bend line D: a hot tub or pool heater on the gas meter, a month estimated rather than read, a summer spent away from the house, and budget billing, which levels the dollars but leaves the therm column alone.

If your bill reports ccf instead of therms, the multiplier you need is printed on the bill itself, beside the usage line, as a therm factor or a Btu factor. PSE's summary sheet even works the example for you: 80 ccf at a factor of 1.056 bills as 84.48 therms. A textbook figure is a national estimate; that one is what the meter was read against. The tariff sidesteps the question entirely, with Schedule 23 stating that "the measurement of service shall be expressed in therms, each equivalent to 100,000 British thermal units" (Schedule 23, Residential General Service, 62nd revision of Sheet No. 123, read 28 August 2026).

The conversion is three numbers wide, not one

One therm is 100,000 Btu. One kWh is 3,412 Btu, EIA's standard conversion factor (EIA energy conversion calculators, read 28 August 2026). So a therm carries 100,000 / 3,412 = 29.31 kWh of energy.

That figure is not the answer, because neither machine delivers all of what it consumes.

Heat into the house  = D x AFUE  (in therms)

kWh the heat pump needs to match it
                     = D x 29.31 x AFUE / COP

AFUE comes off the furnace nameplate; a non-condensing unit is typically 0.80, a condensing one 0.90 to 0.98. Seasonal COP is HSPF2 divided by 3.412, and the HSPF2 to use is the one on the AHRI certificate for the exact outdoor and indoor combination in the quote. The ratio test in the breakeven article works through why that certified figure describes a modelled climate region rather than your winter.

For the example house, AFUE 0.80 and an HSPF2 of 8.9, which is a seasonal COP of 8.9 / 3.412 = 2.61:

564 x 29.31 x 0.80 / 2.61 = 5,067 kWh

Five thousand kilowatt-hours, arriving across five months.

Price the kilowatt-hours where they will actually land

Not at your average rate for the year, and not at the energy charge printed on your rate schedule. Neither one is what the next kilowatt-hour costs.

PSE's Schedule 7 is a two-block residential rate. From 29 January 2026 it prints a basic charge of $7.49 a month, 14.1598 cents per kWh for the first 600 kWh, and 16.1015 cents for everything above 600 (Schedule 7, Residential Service, Sheet No. 7.1, read 28 August 2026 — Sheet No. 7 in the same PDF still shows the block rates that ran until 28 January 2026, which is an easy sheet to stop on). A heat pump adding a thousand-odd kWh to a January bill puts every one of them in the upper block, so 16.1015 is the block that matters.

It is not the price, though. PSE also publishes a summary sheet showing how a residential bill is assembled, and Schedule 7's energy charge is one line of five (Summary of total current prices, electric, Sheet No. S-1, effective 1 May 2026, read 28 August 2026):

Two things on that table are worth stopping on. The tier-2 line is 16.7780, not the 16.1015 the rate schedule prints, because PSE folds a dozen adjustment schedules into that single bill line. And two of the five lines are credits, which is why adding up whichever riders you manage to find in the tariff library produces a number that is wrong in both directions at once.

The sheet checks itself, too. Its worked example bills 800 kWh over 30 days — 600 at tier 1, 200 at tier 2 — and the line totals come to $7.49 + $89.02 + $33.56 + $7.53 + $30.98 - $5.32 - $1.90 = $161.36, which the rates above reproduce.

Not all 20.69 cents is permanent. Schedule 95's power cost adjustment applies "in addition to the rate specified in the otherwise applicable rate schedules" and runs until PSE's general rate case concludes or 28 February 2027, whichever comes first (Schedule 95, 44th revision of Sheet No. 95, effective 1 January 2026, read 28 August 2026); the sheet prints 3.5046 cents and the supplemental rate carries the bill line to 3.8719. City utility taxes go on top and vary by municipality, so 20.69 cents is a floor. Your own bill settles it, and the four numbers that come off that bill are the same ones this worksheet runs on.

5,067 kWh x $0.206882 = $1,048.27.

What stops when the furnace stops, and what doesn't

The gas side gets the same treatment from the same kind of sheet (Summary of total current prices, gas, Sheet No. S-1, effective 1 August 2026, read 28 August 2026):

Schedule 23 on its own prints a delivery charge of $0.64407 from 29 January 2026 (Schedule 23, Residential General Service, 62nd revision of Sheet No. 123). Find the low-income and property-tax riders in the tariff library and add them by hand and you get to $0.71420. The summary sheet's delivery line is $0.83495, and the missing $0.12075 is the 141-series adjustments, the decoupling mechanism and the pipeline replacement recovery — none of which announce themselves anywhere a customer would look.

That gas cost line also settles a question it is easy to get wrong. Schedule 101 prints the residential rate at $0.51888 a therm and, in the next column, $0.54407 "with revenue related taxes," a multiplier of 1.048548 (Supplemental Schedule 101, 49th revision of Sheet No. 1101). Schedule 106's deferred account adjustment prints $(0.10710) and $(0.11230) the same way (Schedule 106, 52nd revision of Sheet No. 1106). Those two after-tax figures add to $0.43177, exactly the summary sheet's gas cost line — so the multiplier belongs to those two sheets and nowhere else. Apply it to the whole stack and you overstate the gas rate by about four and a half cents a therm, which quietly moves money to the heat pump's side of the comparison.

The biggest single line on that table is the one no gas rate schedule mentions. Washington's Climate Commitment Act reaches the bill through Schedule 111, which sets a State Carbon Reduction Charge — printed on bills as the CCA Customer Charge — at $0.25228 a therm for Schedule 23 from 27 January 2026 (Schedule 111, 5th revision of Sheet No. 1111-D, read 28 August 2026). That is 16% of what a therm costs, and it is nowhere in Schedule 23.

So 564 heating therms x $1.58324 = $892.95 a year that would stop.

The $14.00 monthly basic charge would not. Schedule 23 says "the minimum bill per month shall be the basic charge," so a water heater or a range left on gas keeps paying it whatever the furnace does. Schedule 111 gives some of it back: a CCA Customer Benefit credit runs against every residential gas account, $17.01 in January 2026, $3.02 in August, $17.30 in December — $114.61 across the calendar year against $168.00 of basic charges, which puts the real standing cost nearer $53 for 2026. The credit is set a year at a time and the sheet shows $0.00 for January 2027, so it is not a number to project. Count the volumetric therms as the saving and leave the standing charges out until the last gas appliance goes and the account closes. That is the version that hurts the heat pump, and it is the honest one.

One item goes the other way. The furnace blower is an electric load that leaves with the furnace, and AFUE does not describe it — the fan is regulated under a separate federal standard. Take 300 kWh over a season as an order-of-magnitude figure, worked from the federal fan energy rating ceiling in the breakeven article, and substitute your own runtime if you have it. At 20.69 cents that is $62.06 back on the heat pump's side. The heat pump's air handler draws power as well, but for a ducted system the rating procedure counts indoor fan energy inside HSPF2, which makes it worth confirming that the AHRI certificate covers the coil-and-air-handler combination being installed rather than a coil-only rating.

One house, both columns, on sheets in force this month

On these rates the heat pump costs about $93 a year more to run, and every input above is a line you can replace with your own.

That is a close enough result to be fragile, which is the point. It is not a verdict on heat pumps; it is a verdict on one pair of tariff sheets in one month. Set the two costs equal and the COP that breaks even here is 29.31 x 0.80 x 0.206882 / 1.58324 = 3.06 — an HSPF2 of 10.4, above what the ducted systems in most quotes carry, and inside the range a good ductless certificate reaches.

That figure has to be reconciled with the same formula run on EIA's Washington state averages, which returned 2.09. Both are right about what they describe, and the gap is one input rather than a disagreement. EIA's January 2026 state gas price works out to $1.68 a therm against PSE's $1.583, six percent apart. EIA's Washington residential electricity average is 14.95 cents against PSE's marginal 20.69, thirty-eight percent apart, because the state figure blends in consumer-owned utilities whose hydropower rates sit well under PSE's. Swap only the electricity price into that row and 2.09 becomes 2.89; swap only the gas price and it becomes 2.21. The state average describes Washington. Nobody installs a heat pump in Washington; they install it on a tariff.

And a cold-climate unit at a seasonal COP of 3.2 brings line G to 4,133 kWh, which turns the annual difference into about $100 the other way — the heat pump becomes the cheaper machine to run. That is what a breakeven of 3.06 means in dollars: the answer flips inside the range of equipment a contractor can actually order, which is why the COP on the AHRI certificate is worth an argument and the one in the brochure is not.

A warm winter flatters whichever machine you don't own

Line D came out of the last twelve months, and the last twelve months were not normal. They never are.

Heating degree days are the correction. A degree day compares the day's mean temperature to a 65°F base, and NOAA's Climate Prediction Center accumulates them over a heating year running 1 July to 30 June, derived from daily observations at nearly 200 stations and population-weighted for state and regional figures (CPC degree day summaries, explanation, read 28 August 2026). The monthly and weekly files print a departure-from-normal column beside every total.

If last season ran 8% below normal, the furnace did 8% less work than a normal year asks of it, and line D understates the therms an average winter will want:

D normalised = 564 / 0.92 = 613 therms

Push 613 through the worksheet and the annual difference widens to about $107, because at this COP each heating therm costs more to replace with electricity than to keep buying as gas, so a colder winter multiplies a gap that is already there.

Check the date on whichever file you open. The CPC monthly summary read on 28 August 2026 covers July 2026 with accumulations from 1 July 2026, so the cumulative column has just reset and holds almost nothing; the season you actually want ended in June. EIA keeps twenty years of monthly population-weighted degree days by census division in its Short-Term Energy Outlook data browser, and notes that some utilities publish degree days on their websites or print them on the bill itself (EIA, degree days explained, read 28 August 2026). A utility's own figure for your service territory beats a state average, for the same reason the tariff beat the state average two sections ago.

Twenty minutes: two summary sheets and one CSV

The worksheet needs four things and none of them come from a salesperson.

1. Twelve months of therms, downloaded from the gas account portal as a CSV rather than read off a bar chart. Twenty-four months is better, because it gives you two summers to test the baseline against.
2. Your utility's price summary sheet, before its tariff sheets. The summary is the map: it says which schedules land on which bill line, including the ones — Schedule 111 here, a sixth of what a therm costs — that appear nowhere in the rate schedule you thought you were on. The tariff sheets are then worth opening for the definitions and the effective dates, and for the columns that show which rates carry revenue-related taxes.
3. The block your kilowatt-hours will land in. A two-block residential rate prices a heat pump's winter at the top block, and that is the only block worth writing down.
4. The AFUE on the nameplate and the HSPF2 on the AHRI certificate, matched to the model numbers on the quote.

Then run lines A through J. Here the two columns landed a hundred dollars apart, and at that margin the machine has stopped being the decision — the house has taken it over, because every therm it stops needing comes off line D on both sides of the ledger at the same time. The audit that ranks insulation and air sealing by what each one returns begins with the CSV from step 1, still open in the other tab.