What is the wattage rating of the the low and high stages? I would think the low stage of the electric furnace would be sufficient as auxiliary back up heat. But in your location it can get very cold and you may need the high stage. Can your thermostat control three stages of heat? If yes then you may want to set it as a three stage system (heat pump, 1st stage furnace, 2nd stage furnace). I am not sure how this works with lock out temperature settings. Call Honeywell for guidance.

neoheatpump - he lives in N CA in 1000 sq feet - do you really think a 2 stage furnace makes sense? OP - Your heat load is hard to determine because you may have zero insulation and a window open all the time. Probably not but impossible to say without more info. Since your heat load is hard to determine, it is hard to say if you can even have a 2 stage furnace that makes sense. I know around here, when it is 60 degrees out, I don't need heat. In most cold climates, you don't need heat at that outside temp. Solar and internal heat gains give you well over 10 degrees in an insulated, tight house. I'll guess that you have a leaky older house. Your best bang for your buck is to tighten the house. A 95% furnace is overkill for your climate and size house. I would guesstimate that for your situation, you'd probably need $200 a year in gas. A 95% furnace might save you $10 a year over a 90 and $30 over a 80. Very hard to get that to pay off when you pay $1000 extra for it (or more). If you need more gas than that for heat, then you would be better off insulating the house better. My political rant here is that CA is so stupid sometimes. You would do better for the environment by having a heat pump. It would be more efficient in every way than using NG to heat in a mild climate. But you have tiered electric rates that discourage your best option. All they have to do is relax the tier in the winter for heat pumps. Lots of places have lower electric rates for homes with heat pumps - around here we just have lower electric rates in the winter (to encourage heat pumps). Rant off - if you stay in lower electric rates, a heat pump will be cheaper to run. With the typical $.10 a kwh and $1 a therm, at mild temps a heat pump will be half the cost of NG or less. It will cost more however and may not pay off but is a better deal than a 95% furnace (compared to your most cost effective 80% or 90%). Rant back on - does CA mandate 95% furnaces? It would be far more effective to outlaw SUVs or mandate hybrids....

Thanks for the comments tigerdunes. We've been over this quite a bit already. The pricing is average for the North East....labor rates tend to be quite high and the $600 rebate makes the price of the furnaces excellent. I obviously have two stage thermostats and the sizes of the furnaces were decided after heat loss calculations. I live in an older home in a cold climate and my calculations were within 10% of my contractor's. The calculation for my two floor unit came in at 75kBTUs. The contractor initially wanted to install a 100kBTU unit, but I talked him down to 80kBTU. The furnace for the renters below me is a bit large, but it was the smallest two stage available from American Standard. I thought about installing a 92% efficient 40kBTU single stage furnace with selectable motor speed, but as the 60kBTU two stage with variable speed motor was the same price after the rebate I went with that one.so that both furnaces essentially the same and to get the variable speed blower. I imagine having the second stage will also be nice on very cold mornings.

I'm leaning towards just heat pump with heat strips. That should be fine for your area. If you plan on keeping it that warm in the house as you say in your OP, I would get the Bosch Inverter heat pump as it produces heat clear down to about 5-6 degrees ambient and very efficient at what it does. Then use the strip heat as you need it. I don't know that you'll find a contractor though for this for a new construction job as Bosch just recently came to the Houston market a few months ago. The distributor network for Bosch is in it's infancy... so there are pros and cons for choosing this brand. For what it does / how it does it --- it's a game changer for my market. (Katy, Texas area) As a comparison --- an average run of the mill single speed heat pump will probably struggle once temps drop into the 20's for any significant amount of time. They are efficient when compared to strip heat (utility bill cost wise) but there are higher limitations with those. I've gotten email notifications from my electric provider that they are estimating my next electric bill at less than $50 for November. This may wind up being my lowest electric bill ever for my power rate of 12 cents per KWH. With that said, I keep it quite chilly during the winter and my house is all electric (no gas at all). I shut it off at night and really just use it to take the chill out of the house in the morning. If it gets really cold here, I will probably just heat the main part of the house over night --- as I have it attached to a 4 zone duct system. (This is to explain the how and why my electric bill is so low -- design of the HVAC system is a big part of it.)