I had an idea. Okay, my Jules here is very much like Paige was when she first started out. That whole "I'm not a whitelighter, I'm a witch!" business. What if Dan got her in touch with her whitelighter side? By say, helping him learn the ropes, they learn together? And god knows Petey needs looking after from time to time.
I don't see any reason to wait on offing him, he may help, maybe sees them being hurt and goes good Samaritan? Then the demon gets mad and chases him down out of anger or something?