Improper installation of TPR valve on Rannai Tankless water heater

[Elizabeth Chambers]

OK members, I am not a HI yet, still a student. Background on this. For the past year I have been working through the 10 module Carson Dunlop Master course for home inspection, thru ASHI@HOME. I have been lucky enough to have access to a home that some people that I do work for are having built, just one minute away from my house.

This is a house being built by a certain company that are known for cutting corners and contracting out the work on different phases of the build to the lowest bidders.

So I rubbed my greedy little wannabe HI hands together and started inspecting the house build from day one. That is, until they locked me out.

I think they figured out what I was up to because of all the correct this and correct that. calls to the office by the homeowners. Anyway I checked out their new installation of a tankless water heater and this is what I saw.
Tell me guys, how did I do? Did I call this out for all the right reasons?

[Elizabeth Chambers]

OK members, I am not a HI yet, still a student. Background on this. For the past year I have been working through the 10 module Carson Dunlop Master course for home inspection, thru ASHI@HOME. I have been lucky enough to have access to a home that some people that I do work for are having built, just one minute away from my house.

This is a house being built by a certain company that are known for cutting corners and contracting out the work on different phases of the build to the lowest bidders.

So I rubbed my greedy little wannabe HI hands together and started inspecting the house build from day one. That is, until they locked me out.

I think they figured out what I was up to because of all the correct this and correct that. calls to the office by the homeowners. Anyway I checked out their new installation of a tankless water heater and this is what I saw.
Tell me guys, how did I do? Did I call this out for all the right reasons?

So you all know, I do not consider myself at nearly educated enough or experienced enough to actually perform inspections for money. I live in California where there is no educational requirements or any requirement to be licensed, besides getting a business license. Anybody can make up some cards, get a license to conduct business and market themselves as a HI in Cali.
I am not that kind of person.

I'm not presumptuous enough to think that a year of study and passing 10 courses at home taking tests that aren't proctored and pretty much open book, on line, makes me a HI. I have Heating II to finish and I'm done with the 1st phase of educating myself.
I have an apprenticeship lined up with a well known respectable HI who has been very successful with his business. I'll do that for the next year then....I will see how I do and where I'm at and decide where to go from there. So please don't dis me and try not to judge me because all I have now is an on-line education.

[Gunnar Alquist]

So you all know, I do not consider myself at nearly educated enough or experienced enough to actually perform inspections for money. I live in California where there is no educational requirements or any requirement to be licensed, besides getting a business license. Anybody can make up some cards, get a license to conduct business and market themselves as a HI in Cali.
I am not that kind of person.

I'm not presumptuous enough to think that a year of study and passing 10 courses at home taking tests that aren't proctored and pretty much open book, on line, makes me a HI. I have Heating II to finish and I'm done with the 1st phase of educating myself.
I have an apprenticeship lined up with a well known respectable HI who has been very successful with his business. I'll do that for the next year then....I will see how I do and where I'm at and decide where to go from there. So please don't dis me and try not to judge me because all I have now is an on-line education.

Hi Elizabeth,

I don't think anyone is dissing you. Personally, I didn't see either post until this morning (remember, those on the right coast tend to go to bed 3 hours earlier than those of us on the left).

I see your pics, but no explanation as to how you would report. You indicate the location of the PRV between valves and the union on the discharge line. What would you say about it?

[BARRY ADAIR]

all rinnai & most other wh have a piping diagram @ their online manuals
i save for report links ;~))
do a little research now as you'll be doing a lot more if you continue the path to becoming a professional33799

[Jerry Peck]

all rinnai & most other wh have a piping diagram @ their online manuals
i save for report links ;~))
do a little research now as you'll be doing a lot more if you continue the path to becoming a professionalhttp://www.inspectionnews.net/home_inspection/attachment.php?attachmentid=33799&stc=1

If you look at the diagram Barry posted, it also shows a "pressure relief valve", not a "TPR" (temperature and pressure relief) valve. It also shows no valves between the unit and the PR (pressure relief) valve ... and, though not shown in that drawing, no valves after the PR (that would be shown or stated in the PR valve installation instructions).

IRC P2804.6 Installation of relief valves - has specific requirements for relief valves.

IRC P2804.6.1 Requirements for discharge pipe. - that section lists 14 specific requirements/limitation for the the discharge pipe from pressure, temperature, or combination pressure and temperature relief valves.

What do you notice in IRC P2804.1?

[John Kogel]

Gunnar, her notes are in black on the picture. You need a big screen to read them.

To the OP, I think you've reported the issues correctly, but leave out the 'and after' as there is not a valve after in this picture, meaning on the discharge tube.

I prefer comments in language that a 7-year-old can understand. "The pipe should terminate where the discharge is easily visible" for example.
In some jurisdictions, the discharge is required to be terminated outside by the local authority. Check that out in your area. Talk to someone in the building inspection department. 3 Elbows are permitted, AFAIK.

[Jerry Peck]

3 Elbows are permitted, AFAIK.

4 elbows are permitted, unless it has changed ...

[BARRY ADAIR]

4 elbows are permitted, unless it has changed ...
4 elbows is correct, below is just one of many replies from a mfr
Hello Barry:
The discharge piping should not exceed 30 ft. and 4 elbows.
Thanks,
John Brill
OEM Sales Manager
Technical Support Manager
CASH ACME
Division of the Reliance Worldwide Corporation
2400 Trade Drive S.W.
Cullman, AL 35055
Phone: (256)775-8179 Email: JBrill@cashacme.com

also if the op tankless is in a location where damage can occur from leakage a drain pan w/properly installed drain line is required

[Gunnar Alquist]

Gunnar, her notes are in black on the picture. You need a big screen to read them.

Oh, duh. I was looking in her post for the comments not on the pic. Oh well. ;)

[Elizabeth Chambers]

[

- - - Updated - - -


Oh, duh. I was looking in her post for the comments not on the pic. Oh well. ;)


I apologize for that, I will put my comments in the post from now on. Thanks guys for your replies.

I did reasearch and downloaded the installation imstructions off the Rannai site. I got the same diagram and read all the info. I did not know it was a PRV valve and not a TPRV.

So I certainly should mot say anything about it Gunnar, if I dont even know what it really is. I did tell the homeowner/friends that the installation was incorrect, but we should wait and see what county inspector says about it, to make sure. For the rest I will get back to you guys tomorrow after I finish beating myself over my head.

[Jerry Peck]

I did not know it was a PRV valve and not a TPRV.

That valve LOOKS LIKE a T&P relief valve with that test handle, I don't recall pressure only relief valves having a test handle ... but ... as I type this I recall having said that before and having been shown that I was wrong ... ???

So check the above out - and take a legible photo of that metal label where the test handle is as that will show you:
- the type of valve it is
- the rating(s) of the valve (psi, degrees, input rating)
- the maximum number of elbows in the discharge line
- the maximum length of the discharge line
- and pertinent information (that label is the listing, labeling, and installation instructions for that valve)

Pressure relief valves have the same requirements as combination temperature and pressure relief valves in that:
- no valve is allowed before or after the safety relief valve (that would allow the safety relief protection to be disabled)
- an all those other 14 items in the code list.

And you did catch the valve before the safety relief valve.

Did you look in the code for what it pointed out as asking if anyone noticed something in that section?

[Gunnar Alquist]

[I apologize for that, I will put my comments in the post from now on. Thanks guys for your replies.

Not a requirement. I could have paid better attention.



So I certainly should mot say anything about it Gunnar, if I dont even know what it really is.

I disagree. You may, or may not, have the correct terminology (JP's comment below), but you clearly understand the diagram and requirement better than the plumber did.



And you did catch the valve before the safety relief valve.

[Elizabeth Chambers]

Not a requirement. I could have paid better attention.



I disagree. You may, or may not, have the correct terminology (JP's comment below), but you clearly understand the diagram and requirement better than the plumber did.

I hope I don't get your names mixed up with your advice, or forget anybody, please forgive me if I do
.
Thank you much John, for pointing out that there is only one isolation valve before the PRV and not one after, that valve is on a different line. You are right, I messed that part up and will pay better attention

Also thanks Barry, for the thing about the drain pan, I will let them know that they have that option if the discharge line is re-installed where it is observable to the occupants like it should be and in the same room as the water heater, which is also a requirement.

Thanks to you too Jerry, I got it!

Gunnar you asked me the hardest question, what do I say about it? How do I say it? My friends, they just want to know if it's right or not and want it corrected, if wrong, explanations they could care less about.

Funny the hubby is a retired microbiologist, a genius, in my book, who discovered two new kinds of bacteria previously unknown to science. But if you try to explain something the least bit technical to him his eyes go blank and he just says " uhhu, uhu" and doesn't even try to understand. But explanations and descriptions are a HI's bread and butter, if I can't put the defects I see into plain language, I won't be able to do this.

I added a few more pics, without my writing all over them. The rubber hose you see is a condensate drain from the collector at the top of the heater, I called that out for improper material used and not properly secured. Because I know that condensate is acidic and will eventually deteriorate that hose. I recommended it be replaced with PVC pipe. That's right ...right? I'm thankful there are HI s like you guys who are willing to help people like me out.

P.S. the vent is loose too, called it out. I will let you know if the county inspector calls out the same defects I did or not.

[Mark Hagenlock]

Elizabeth,
Is there room for the gas supply shut- off to close fully?

[Jerry Peck]

Another item (potentially):

What room/space/area is that installed in? I.e., what is on the other side of that wall, and where are you standing when taking those photos?

If you are standing in a garage, and the dwelling unit is on the other side of that wall, then the drywall screws/nails need to be mudded over, the drywall seams mudded and taped, and the holes where the pipes go into the wall sealed around.

If you are standing in a laundry room and the garage is on the other side of that wall, the same applies, but applies for a different reason.

If you are standing in a laundry room and another area of the living space is on the other side of that wall, the seams need to be mudded and taped, and the holes around the pipes sealed, for yet a different reason. The screws/nails could be left exposed.

[Gunnar Alquist]

Hi Elizabeth,

One thing that I have always found helpful in reporting is to break each item down into manageable chunks. 1) What did you see? 2) What is the concern? 3) What is the remedy? This helps folks to understand the issues.

In the case of the PRV, I would say something like:

1) The pressure relief valve is located between two shutoff valves.
2) Turning off the shutoff valves would isolate the pressure relief valve from the water heater, which could allow excessive pressure to build-up in the water heater, resulting is rupture of the water heater and/or piping. This is a potential safety hazard.
3) A licensed and qualified plumbing contractor should be hired to make any needed corrections to comply with the manufacturer's installation instructions and any applicable codes.

One good place to talk with more and less experienced inspectors would be at an association meeting. Both CREIA and ASHI have chapters throughout California. Times and locations would be on their websites. Each chapter is a bit different, but the attendees at the few chapters that I have been to have been welcoming and willing to answer questions. Sometimes a bit too willing to answer questions, given that we are all VERY opinionated.

Joining an association will expose you to a great deal of information and educational opportunities. I highly recommend attending local chapter meetings as well as annual conferences. CREIA has a conference coming up April 27-29, 2018 in Costa Mesa. and I believe ASHI's 2019 conference will be in San Diego. Next year, CREIA's conference will likely be in the northern part of the state, maybe San Francisco or somewhere near.

[Jerry Peck]

Next year, CREIA's conference will likely be in the northern part of the state, maybe San Francisco or somewhere near.

Having driven from San Francisco, where I met Gunnar and the late West Coast Jerry, to "northern California" ... I would not call San Francisco "Northern California".

To me, that is like "Nuw Yorkrs" (meaning those in New York City) saying that, basically 'everything else' in New York is "Upstate", when in fact they are the ones sticking out into the ocean away from everyone else ... talk about the "tail waging the dog" ... :D

[Gunnar Alquist]

Having driven from San Francisco, where I met Gunnar and the late West Coast Jerry, to "northern California" ... I would not call San Francisco "Northern California".

We in California are a bit foggy on geography. Los Angeles and San Diego are So. Cal. Santa Barbara and Fresno are Central Cal and anything north of that is No. Cal.

Like you said, there is New York City. Everything else is Upstate.

[Elizabeth Chambers]

Elizabeth,
Is there room for the gas supply shut- off to close fully?

I will check that out Mark.
Jerry
I am standing outside in front of the closet provided to hold the water heater and a master bath shower stall is behind that back wall.
Gunnar, I am 30 minutes below one of the gates to Yosemite National Park, Frisco is about 3 &1/2 hours away. I agree but hard for me to be away for that long, I care for a husband who is sick and disabled and cant be left alone long enough for me to get there, attend meeting and get back. I will look for a meeting in Fresno or Clovis, that would be doable for me. Thanks

- - - Updated - - -


Elizabeth,
Is there room for the gas supply shut- off to close fully?

I will check that out Mark.
Jerry
I am standing outside in front of the closet provided to hold the water heater and a master bath shower stall is behind that back wall.
Gunnar, I am 30 minutes below one of the gates to Yosemite National Park, Frisco is about 3 &1/2 hours away. I agree but hard for me to be away for that long, I care for a husband who is sick and disabled and cant be left alone long enough for me to get there, attend meeting and get back. I will look for a meeting in Fresno or Clovis, that would be doable for me. Thanks
I will get the pic of the valve tag as soon as it dries out over there a little. We just got some snow.

[Elizabeth Chambers]

So Jerry, this is located in a built in closet with a vented door, that can only be accessed from outside the house.

[BARRY ADAIR]

So Jerry, this is located in a built in closet with a vented door, that can only be accessed from outside the house.

hopefully you are aware that's an outdoor only unit

[Jerry Peck]

hopefully you are aware that's an outdoor only unit

Did you see a model number or something that said that? I know that the make units for indoor use and units for outdoor use, but I haven't seen enough to know what to look for as a give away to which it is (they were just getting popular when I retired from home inspections).

[Jerry Peck]

So Jerry, this is located in a built in closet with a vented door, that can only be accessed from outside the house.

The "vented door" tells me that closet is "outside" the thermal envelope of the house (but not "outdoors" - see Barry's post) - which indicates those interior walls are the thermal envelope, which means the drywall needs to be mudded and taped, as well as insulated (look in the holes around the pipes for insulation).

[Jerry Peck]

hopefully you are aware that's an outdoor only unit


The "vented door" tells me that closet is "outside" the thermal envelope of the house (but not "outdoors" - see Barry's post) - which indicates those interior walls are the thermal envelope, which means the drywall needs to be mudded and taped, as well as insulated (look in the holes around the pipes for insulation).

I think I found what you may have been referring to - one of the photos shows the model as "V75", and, ...
- it is suitable only for outdoor use or only for indoor use if: (from here: https://www.master.ca/documents/regroupements/1U307-1120.pdf )

- FOR OUTDOOR APPLICATIONS ONLY
- - V75e......................REU‐VC2528W‐US
- - V65e......................REU‐VC2025W‐US

- FOR INDOOR APPLICATIONS ONLY
- - V75i.......................REU‐VC2528FFU‐US
- - V65i.......................REU‐VC2025FFU‐US

With the identifier being the "e", for "exterior" use only, and "i" being for "interior" use only ... (those are my guesses for the "i" and "e" designations).

[BARRY ADAIR]

I think I found what you may have been referring to - one of the photos shows the model as "V75", and, ...
- it is suitable only for outdoor use or only for indoor use if: (from here: https://www.master.ca/documents/regroupements/1U307-1120.pdf )

- FOR OUTDOOR APPLICATIONS ONLY
- - V75e......................REU‐VC2528W‐US
- - V65e......................REU‐VC2025W‐US

- FOR INDOOR APPLICATIONS ONLY
- - V75i.......................REU‐VC2528FFU‐US
- - V65i.......................REU‐VC2025FFU‐US

With the identifier being the "e", for "exterior" use only, and "i" being for "interior" use only ... (those are my guesses for the "i" and "e" designations).

yes Jerry, correct again, based on 03-04 reply & added pix

[Jerry Peck]

yes Jerry, correct again, based on 03-04 reply & added pix

Barry,

taking that a step further, I didn't think of doing this earlier ... looking at the manual I linked to for drawings showing the "i" and "e" differences, I found several, the best being on page 10 of 80, and when there is a 'vent' at the top of the front and the front panel is enclosed, that would be an "e" model for outdoor use only, and the one with the exposed control buttons and the top vent would be an "i" model, and the photos posted, including the new photos, shows the exposed control button and the vent at the top, which indicates that is an "i" model and is suitable only for use indoors, which is where it is.

Thus they got two thing right:
- They installed the indoor model indoors.
- They configured and installed the sediment trap correctly.

That is two pluses for the installer ... albeit they kinda dropped the ball after that.

[Elizabeth Chambers]

Correct guys. I did chk to make sure it was suitable for indoor use. I think the vent sbould also have a "thimble" or some kind of collar on it where it goes through to roof of the closet. Needs water pipes insulated from freezing weaother as well. And yes Jerry I did sugges sealing large holes and finishing he room.

Going to try and do a complete final inspection on the house today or tomorrow and get a closer pic of the PRV.

[Jerry Peck]

Going to try and do a complete final inspection on the house today or tomorrow and get a closer pic of the PRV.

See if you can get a good, in focus, photo of the label on the PRV - the information on that label will tell us a lot about that valve.

[Elizabeth Chambers]

See if you can get a good, in focus, photo of the label on the PRV - the information on that label will tell us a lot about that valve.

OK Jerry and Barry, I took some pics with my camera instead of my phone. It's vented at the top. and here is a good pic of the valve. Now here's what I am thinking now, after scrutinizing it further.

That whole device looks like one unit. So perhaps that's really NOT a shut off valve above it. It looks as if that hole in the device is provided there to install the valve in that location. Look at these new pics and see what you think. I still am correct as far as the discharge termination location, but I'm thinking I may not be right about a shut-off valve between the heater and the valve...because that device looks like it's some kind of intigrated something.

oh and I also found that the bolts holding it to the wall aren't as they should be, check it out.

Also yes, the gas valve does have enough room to turn it off and on

[Jerry Peck]

OK Jerry and Barry, I took some pics with my camera instead of my phone. It's vented at the top. and here is a good pic of the valve. Now here's what I am thinking now, after scrutinizing it further.

1st photo: That is a pressure relief valve, no temperature relief, however, it is also rated for thermal expansion, which means it has temperature sensing capability (albeit thermal expansion is not so much 'getting hotter' as it is the water 'expanding due to being heated', which increases the pressure slightly).

- The key, though, is that, for thermal expansion, the pressure should be less that 150 psi (150 psi is the maximum rating typically associated with water heaters and T&P relief valves due to releasing under excess temperature and pressure prior to exploding and taking off like a rocket (http://constructionlitigationconsultants.com/technical_docs.htm ).

- But ... the valve is listed as being "Thermal expansion rated", so leave that to the valve manufacturer and listing agencies for liability and science.

2nd photo: I don't know that that 'on' indicates at that top "valve" other than it is a "valve" which is "on". That black part looks like it could be an vacuum breaker ("P2804.7 Vacuum relief valve. Bottom fed tank-type water heaters and bottom fed tanks connected to water heaters shall have a vacuum relief valve installed that complies with ANSI Z21.22." note, though, that is not a "tank" type water heater).

- That 'looks like' a valve of some type, so I would comment on it and try to find out 'what type of valve it is, what it is for, and why it is there, and (most importantly) that it "does not" shut off the flow through the to the pressure relief valve (it may only shut off the attached device to allow replacement of the attached device (vacuum breaker?). Note that there is a similar device and similar "valve" on the cold water line feeding the water heater.

3rd photo: You are sure there is enough room for that gas valve handle to be turned off and clear the gas line to the unit? Just an optical illusion to look like there is no room for that valve handle in there. :)

4th photo: Is that top opening high enough? Are the openings large enough?

- That exposed foam of the foam core door is now exposed to rain and sunlight, the foam will deteriorate from the sunlight, and get saturated from rain.

5th photo: That red valve handle does look like it shuts off the feed to the attached device ... looks that way ... \

- The gas shut off valve handle still looks like it does not have enough room to be turned fully off.

[BARRY ADAIR]

not vacuum
isolation valve kit (http://www.isolationvalvekit.com/)

gas 1/4 turn 90° is off in pix, almost anything more inline toward the sediment trap should allow sufficient gas flow

[Elizabeth Chambers]

not vacuum
isolation valve kit (http://www.isolationvalvekit.com/)

gas 1/4 turn 90° is off in pix, almost anything more inline toward the sediment trap should allow sufficient gas flow

Ummm sorry Barry, ya lost me there. I do not comprehend what you just said about the gas shut off. You are speaking HI lanquage, I did not understand that at all. I know its important so would you please explain it to me? I appreciate your help.

I didnt actually turn the gas shut off for fear I might screw something up. I did look, and thought it might be better located in the front where it would be easily accessable. Is that what you mean?

Forgive me for sounding so ignorant, but I am ignorant of many things related to inspecting. I am going to assume that your professional opinion is that the gas isolation valve should be reinstalled in a way that allows the homeowner to reach in quickly turn it off in case of earhquake, emergency, leak, whathaveyou. Rather than having to reach around in such a confined space to shut it off. Am I correct?

Speak english Jerry! Hahaaa

- - - Updated - - -

The county inspector said absolutly nothing about the water heater.
He wanted gravel in the driveway and screens on the windows for cripessakes!

[BARRY ADAIR]

not meant to be mean & not sure i can explain any better
all 1/4 turn valves
handle perpendicular to pipe/flow, 90° is off
handle in-line, parallel w/pipe flow is on
if you still don't understand go to a bigbox or hardware supply and look at ball valves & activate handle to see how they operate
assure WOG "water, oil or gas" is ebossed on the gas valve body
if you can provide a detail pic of the gas valve once all utilities are connected and the w/h is functional that will be much appreciated & end much of this gas valve dialog

[Jerry Peck]

not vacuum
isolation valve kit (http://www.isolationvalvekit.com/)

Thank you Barry - still learning new stuff every day.

Not having a tankless water heater, and no longer inspecting (not even code inspections, retired from code inspections 3 years ago) I had not seen those isolation valves.

I did a Google search on isolation valves and found many types out there, most seem awkward to use - most have the hose connection to the side, not allowing much space for connecting a hose).

Others appear awkward for turning to isolation valve handles - the one in the photo looks like it requires the use of a wrench.

From what I found on some of those isolation valves (at least while looking on my phone) seems that the isolation valve on some are 'in line' with the water flow TO the PRV, instead of AFTER the PRV ... and that would not meet the code prohibition against valves between the heater and the relief valve.

Am I seeing those right? Especially the double position single valve ones?

[Jerry Peck]

gas 1/4 turn 90° is off in pix, almost anything more inline toward the sediment trap should allow sufficient gas flow

"almost anything more inline toward the sediment trap should allow sufficient gas flow"

I recall that ball valves are intended to be 'open' or 'closed', not used to 'regulate" flow - which means that the handle needs to have room for the full quarter turn movement from full closed to full open.

And me bad about the direction of the handle - you are correct ... aligned with the valve body is 'on' and perpendicular with the valve body is 'off".

[BARRY ADAIR]

Thank you Barry - still learning new stuff every day.

Not having a tankless water heater, and no longer inspecting (not even code inspections, retired from code inspections 3 years ago) I had not seen those isolation valves.

I did a Google search on isolation valves and found many types out there, most seem awkward to use - most have the hose connection to the side, not allowing much space for connecting a hose).

Others appear awkward for turning to isolation valve handles - the one in the photo looks like it requires the use of a wrench.

From what I found on some of those isolation valves (at least while looking on my phone) seems that the isolation valve on some are 'in line' with the water flow TO the PRV, instead of AFTER the PRV ... and that would not meet the code prohibition against valves between the heater and the relief valve.

Am I seeing those right? Especially the double position single valve ones?

Jerry- please post a specific pic of an IV you're describing


"almost anything more inline toward the sediment trap should allow sufficient gas flow"

I recall that ball valves are intended to be 'open' or 'closed', not used to 'regulate" flow - which means that the handle needs to have room for the full quarter turn movement from full closed to full open.

And me bad about the direction of the handle - you are correct ... aligned with the valve body is 'on' and perpendicular with the valve body is 'off".

agreed!
not technically right but mostly open should work or request they install a proper length nipple for full open gas valve operation
kinda like most old valves, full open then 1/4 turn toward closed so there was enough room to execise one that was stuck

[Jerry Peck]

Jerry- please post a specific pic of an IV you're describing.

Barry,

I looked at some of the suspected ones (on my computer this time) and they may have a side hole in the ball which could allow the PRV to still be open to the flow from the heater. I would need to see a cut-away drawing to see that, though. They could have a path in the ball which goes from heater through to hot out with a side opening to the PRV; when the valve is turned, the path may rotate to from the heater to out the isolation valve with the side opening to the PRV still open.

[Elizabeth Chambers]

By Jove I think he"s got it!
That would make perfect sense. If I am understanding you right, you are saying that the isolation valve has a hole in the ball that when turned parallel to the discharge pipe allows the relief valve to discharge ...wait a minute I have to think about this....

I now understand exactly what you are saying about the gas valve Barry. I will turn the valve to be sure there is enough room for it to close completely. More on this tomorrow. Seems like the more times you look at something the more you see.

[Elizabeth Chambers]

Ok everyone, I have my answers. The device above the PRV (valve)
is a service valve that is opened to drain and flush the water heater during regular maintenance. It is supposed to be located above the
isolation valve, NOT above the PRV.

So I was correct, that PRV should be the closest thing to the water heater, with nothing between it and the water heater, thats what shows in Rinnai installation diagram.

Also, the discharge for the PRV must be in the same room as the heater and must discharge through an air gap. It should be noticable to people living in the house.
As mentioned above, where the PRV discharge may cause damage, there is supposed to be a pan under it. There is not. Now I have to make sure the gas handle opens and shuts fully.

Thanks all for yoir help and suggestions. I learned alot from this.

[Elizabeth Chambers]

You were right on the money, Barry. That gas valve handle does NOT have enough room to open completely. You have eyes like a hawk!
I have another question then. Can this kind of condition cause incomplete combustion? I would say it has at least another inch to go before it can be fully opened. Which it cannot be because it hits the pipe first. I know there are requirements for gas piping sizes to make sure the water heater gets the flow of gas it needs.

If the shut-off valve on the gas line cant be fully opened is that a reportable defect?
Or should I say calloutable defect?