Heating and Cooling in Wisconsin

My air conditioner is nearing the end of its life and the furnace is quite old as well, although it still works fine.  We are starting to investigate replacement options for both.  In Wisconsin it seems like the main choices are:

• High efficiency furnace and air conditioner
• Geothermal heat pump
• Hybrid system with regular heat pump and high efficiency furnace

We do not have room in our yard to dig up and install the underground pipes for the geothermal so that is ruled out easily.  I was in the process of creating a complicated Mathcad sheet to calculate the return on investment of the high efficiency furnace plus air conditioner vs. the hybrid system when I discovered a fundamental flaw in the hybrid system for use in WI.  Here are some basic calculations.

therm_rate = $1.19   (approximate cost per therm of natural gas in WI)
afue = 0.92   (typical efficiency for a high efficiency furnace at converting energy in the natural gas to delivered heat in the home)
furnace_cost_per_therm = therm_rate / afue   (calculation of the cost per therm of heat delivered to the house by the furnace)
furnace_cost_per_therm = $1.29

kwh_rate = $0.116  (approximate cost per kWh of electricity in WI)
hspf = 9   (ratio of BTU of heat delivered to Wh of electricity consumed by a high efficiency heat pump proposed for a hybrid system)
kwh_per_therm = 100,000 BTU / 9 / 1000  (amount of electrical energy needed to deliver 1 therm of heat to the hosue)
heat_pump_cost_per_therm = kwh_per_therm * kwh_rate
heat_pump_cost_per_therm =  $1.29

Based on current rates for natural gas and electricity in WI, there is no cost advantage to having a heat pump vs. having a furnace.  Assuming the cost of having a heat pump and a furnace plus air conditioner were the same it would be a toss up.  However in WI a heat pump alone will not provide enough heat on the cold days in winter (unfortunately most days!), so a hybrid system is needed where a heat pump and furnace would be combined together in a system.  This would definitely cost more than furnace and air conditioner system though.  So the only way a hybrid system would make sense is if there was cost savings on milder days when the heat pump cold heat the house.  I had assumed that to be the case based on what a heating salesman had said, so I started to make the complicated return on investment worksheet to determine if a heat pump made sense based on its extra cost.  In the process I discovered that there is no savings.

From a high level I guess I'm a little surprised by this.  Most electricity in WI is generated from Nuclear and Coal which I believe are lower cost fuel sources than natural gas.  The innefficiencies of generation and delivery of electricity appear to eat up the cost savings from these sources vs. natural gas at the present time.  In areas where natural gas is more expensive in relation to electricity then heat pumps probably make sense.  Based on this I don't think geothermal currently makes much sense in WI either unless the HSPF rating of those systems is much higher than a regular heat pump.