The electric rates are as follows (in cents per kWh):
- with a split meter, the loads that are subject to being shut off are 3.1 with everything else not subject to being shut off at 7.4 in summer and 6.4 in winter. After all fees and surcharges the rates for loads that are subject to being shut off are more like 7.5 with everything else not subject to being shut off at 12.1 in summer and 11.0 in winter.
- The all-electric rates (where the utility will not disconnect service during peak periods) 5.1 in winter with the standard rate of 7.4 in summer. After all fees and surcharges the rates are approximately 9.7 and 12.1.
- In both cases, the winter rates apply Oct. through May, or 2/3 of the year.

Well...lets run the numbers.

It looks like you save 2 cents/hours going with the shut off rate, which at your heatloss of 72000btu/h and minneapolis weather data should save you about $250/year.

However, now you must run a furnace for 4 hours per day (16.6% of your heatload), with natural gas at $ 1.36/therm ( including fees and delivery should run you about at least in western new york, don't have Minnesota numbers), it runs you about $430, compared to $230 with geo. So your advantage with the peak shut off rate is down to $50/year.

But you lose the advantage of having the rest of your electric house supply running at the all heat rate (you said there is only one meter then, correct?). Lets say an average house runs at $120/month, $1440 annually, and you save about 1.3 cents/kwh, that is about $170/year. So now in total you are paying already $120/year more versus all-electric.

Now you have the increased upfront costs of a new additional furnace, plus the additional maintenance of it. Sounds like a clear case for geo with electric supplement heat element at the all electric rate without any shut-off. Let me know if I have missed something here.

I threw out the number of 4 hour per day ON THE COLDEST DAYS of winter which is how my utility operates. TJs utility likely operates differently. My utility by rule can shut me down for a max of 200 hours per winter and up to 10 hours in a day. The reality is 4 hours in a day and closer to 100hrs per heating season. If I had an option of an all electric rate I likely would have chosen it over a load management option. They just put in smart meters, do I can imagine what's coming next......

OK...giving 2000 hours of runtime per heat season, 100 hours are about 5% of the load.
So the cheaper rate will save him about $250, so instead of 300 hours run time for the furnace it will be 100. He pays then about $80 more for the gas, advantage down to $170 per year. The $170 of benefit to run the rest of the electric house supply at the cheaper all electric rate factored in, it seems pretty much a wash for the the usage costs. There is the increased upfront cost of an additional furnace.......

I have done a detailed financial analysis of the cost of operating the split system with dual-fuel/cycled electric rates vs. the packaged unit with the all-electric rates and as docjenser suggested, it pretty much a wash. However, as hard as it is to believe, there is NOT an upfront cost penalty with the furnace for a split system. In fact, two of the firms quoting are showing a $2,000. to $3,000. LOWER upfront cost with the split system. There is a rebate fron the utility for installation of a new high-efficiency furnace which accounts for about 10% of that savings, however there is additional cost to install the split electric meter which would negate the rebate value. When the bidders were asked how this could be, they pretty much indicated it is the pricing strategies from the geo unit manufactures that they are more agressive with pricing on the split system components than they are with the packaged units. And the pricing on furnaces is more competitive than with geo units. As an additional incentive, one provider is offering to pay my utilities for the next two years for operation of the geo unit (up to $2,000.) if I go with a split system. In the end, the split system will be 10-20% less upfront cost. While this is not the direction I would prefer to go, the payback for the integrated system is very difficult to justify. It would need to be done on the principal of the matter and the desire to eliminate a gas furnace from the home.

Has anyone else seen such pricing oddities or have an explanation on how a split system could be significantly less upfront cost that a packaged unit?

Equipment is slightly cheaper and the electrician bill is lower. Other than that........
At the risk of picking at a scab, the software I use also defaults to Tulsa OK which does not make it a good design pick everywhere.....
j

Only in America....... Have a split system installed but with a electric supplement element. After getting that $2K cheaper, give a brand new high efficient furnace away to somebody in need. Beat the system! And smile!

Beware of shorter warranties sometimes in split systems.
J