There are three valves at the water heater, for summer use two valves are open one is closed. Rob Roy has a great schematic I bet he will post later. The valve that that stubs between two water pipes should be close.
As for water pressure drop, that has me a bit stumped.does it do it for both connected to city water, and through the water pump?
Start with checking the valve position. If the handle is turned to be inline with the pipe the valve is open, if the valve handle is perpendicular to the pipe, the valve is closed. Two open, one closed.
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