A couple of years ago I switched out an oil fired water heater which supplied a radiant floor and a hydronic air handler. At the time, oil was at an all time high and I calculated that a propane on-demand water heater (85% eff) would save me enough based on efficiency alone, since the oil heater very poor efficiency (50%), and propane seems to fluctuate less than oil. That year I was paying over $1 a litre for oil and I was getting quotes for propane in the high $.70 /l. Of course, the year after oil dropped significantly, so I'm not sure I ended up saving a whole lot.
In any case, for the past 6 years I've been tracking my energy usage from the time I was on oil to today and comparing the BTU used with other heating fuels.
Note that the statements below assume the following: Hydro (100% eff, COP =1) = $.1 /kwh off peak, $.15/kwh peak, propane efficiency approx %85.
I agree that the case for propane doesn't make sense when comparing with electricity. However, off-peak hydro is comparable to propane at $.60/l and much cheaper than the mid-winter propane prices (In January, I pay more than $.75/l). Peak hydro is way more expensive than any propane I ever paid for.
The key may be to get away from the mid-winter refueling at the high prices and take advantage of the time of use hydro prices. Summer has some of the lowest propane prices (approx $2.80 100Kbtu or lower) but it would require a pretty big tank to last the whole winter. A dual-fuel system, with hydro running during off-peak hours ($2.92/100kbtu), and switching to propane during peak times may extend that cheap propane just enough to skip the expensive refills.