Short answer: your gas usage drops by roughly the share that heating used to take, and your electric bill rises. Whether your total goes down depends on rates, equipment and how you run it. The piece people miss is the gas fixed charge. As long as one gas appliance stays connected, you keep paying it every month. That's the main money difference between dual fuel and going fully electric.
Two parts of a gas bill
Every Colorado gas bill has:
- A fixed monthly charge you pay regardless of use. Xcel calls it the Service and Facility charge. Xcel's residential plan page listed $12.00 a month for gas when we checked on October 8, 2026. Xcel sources disagree slightly (an older 2024 brochure showed $11.00), and new gas rates took effect on October 6, 2026, so check your own bill for the current figure.
- Usage charges per therm, which move with gas costs and rate cases.
The Colorado PUC approved a settlement in Xcel's gas rate case in September 2026. Residential bills rise 8.6%, about $5.16 a month on average, effective October 6, 2026.
When you switch heating to a heat pump, the usage charges fall a lot because heating is usually the biggest gas use in a Colorado home. The fixed charge doesn't change at all.
Two parts of an electric bill
Xcel's electric bill also has a fixed Service and Facility charge, listed at $7.10 a month on its time-of-use page. You already pay it, so adding a heat pump doesn't change it.
What changes is energy use. For most Xcel customers with an advanced meter, time-of-use pricing is the default. On-peak hours are 5 p.m. to 9 p.m. on weekdays, and power costs more then. Winter evenings are exactly when a heat pump works hardest. Some practical moves:
- Let the house warm a degree or two in the afternoon before on-peak starts.
- Avoid deep overnight setbacks with a heat pump. Recovering from a big setback can trigger backup heat.
- Run a heat pump water heater outside on-peak hours if its controls allow.
Xcel also offers a flat-rate opt-out plan. Compare your own usage on both before deciding.
Three ways to set up your house
1. Keep the furnace and AC, change nothing
Your bills stay as they are. Your AC will eventually need replacing; when it does, a heat pump costs little more than a new AC and gives you a second heat source.
2. Dual fuel: heat pump plus your existing furnace
The heat pump handles heating most of the year, and the furnace takes over below a set outdoor temperature (the "switchover" point). You keep:
- the gas fixed charge every month;
- gas usage on the coldest days;
- gas water heating and cooking, if you haven't switched those.
Dual fuel is a sensible choice when your furnace is fairly new, when you're nervous about cold snaps, or when your home loses heat quickly. It also lets you set the switchover based on cost. When electricity is expensive relative to gas, the furnace may be cheaper below a certain temperature.
For standard (non-cold-climate) heat pumps in homes heated with Xcel gas, Xcel's rebate form requires gas backup to remain. Cold-climate and ground-source systems are exempt on the same form, though another section of the form is less clear for ductless, so confirm with your contractor.
Black Hills Energy's gas side pays a rebate of up to $3,490 for a gas-fired heat pump with gas furnace backup in 2026, which is a different technology from an electric heat pump paired with a furnace.
3. Fully electric
Heat pump for heating and cooling, heat pump water heater, induction or electric cooking, electric dryer. When the last gas appliance goes, you can ask your utility to close the gas account. Then the fixed charge stops.
Before that, check with your gas utility about closing the account and what happens to the meter. Your backup heat will be electric, so size the heat pump well. See will a heat pump keep me warm.
Why gas fixed charges matter more over time
Colorado's Clean Heat law (SB21-264) requires gas utilities with more than 90,000 retail customers to file plans that cut emissions, with targets of 4% below 2015 levels by 2025 and 22% by 2030. The law caps the cost of those plans at 2.5% of annual gas bills. As more households electrify, the fixed costs of the gas system are spread across fewer customers. We aren't predicting rates, but it's one reason people who plan to go fully electric eventually like to do the last appliance and close the account.
How to estimate your own numbers
You need four inputs:
- Your gas use for heating, from last winter's bills minus a summer month (summer gas is water heating and cooking).
- Your gas usage rate per therm and the fixed charge, from your bill.
- The heat pump's efficiency at your temperatures, from the manufacturer's data. Your contractor should provide it.
- Your electric rate, including time-of-use if you're on it.
A good contractor can run this with you for all-electric and dual fuel side by side. If a proposal shows only savings and no fixed charges, ask for the full picture. For upfront cost, see what a heat pump costs.