Brian, your discussion of where the electricity comes from, efficiencies of converting other energy sources into electricity, etc were all part of my reading and discussions with the people I talked with and the reading I did before buying the new furnace/heat pump system.
First off, our main heat source is passive solar. Any sunny day, in even below zero weather, heats our home with little or no extra energy other than some fans to move the heat around at bit. So, for us, the heat pump or furnace just needs to keep the house warm until the next sunshine hits us.
Secondly, in our area, our electricity is primarily coal generated. In my discussions with our electric coop people, they told me that coal plants are essentially on or off. They have to make sure that they have the ability to meet maximum demand at all times. If they have demand over their capacity to supply it, they have to go onto the open market and buy it from whoever has excess and at the price that that seller sets. If they have to do that too often, then they need to build more generating facilities. (They are working to bring in more wind power, and I am pushing them toward coop member owned solar, but that is another story.)
So, their point was that the more consumers they can get on the demand control system like ours, the less likely they are to need to build more generation facilities. Whenever demand nears capacity they send a radio signal out to my control box that switches off electric flow to my heat pump and we use the LP furnace. When they are allowing power to my heat pump, it is essentially excess energy that is being produced anyway whether their customers need it or not - due to the nature of coal generators and being ready to meet max demand.
Thirdly, I would love to be able to use natural gas, but the chance of someone bringing a natural gas line out to our rural home is about zero.
Eric (and Mary who is in no way responsible for anything stupid I post)