A system to reduce standby losses in a hot water heater is presented. The system utilizes a dual safety relay valve between the combination gas controller and the burner. The dual safety relay valve bypasses gas to a rotary damper actuator valve to position a damper flapper valve located over/inside the flue pipe. Once the flapper valve has opened to ensure combustion, the gas is allowed to flow back to the dual safety relay valve. Some of the bypass gas may be diverted to boost the pilot or to supply a booster. The dual safety relay valve is then opened to allow the gas supply to the burner. Once the burner is turned off, bypass gas bleeds out of the rotary damper actuator valve to close the damper flapper valve to reduce standby losses through the flue pipe, and to allow the dual safety relay valve to close tightly.