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A proper evaluation of the type of water heating system required to meet maximum demands while reducing energy input rate to the lowest possible average must recognize the characteristics of water flow rate variations - in quantity of flow (gpm), time intervals between change in flow rates, and the degree of change. In other words: Is the water flow usage a surge type load or an average sustained type? How much will wide variations in the required temperature rise affect variations in the energy input rate? Will the input rate thereby unnecessarily increase above the average or most economical rate, to an uneconomical maximum? This paper will attempt to answer these questions.