Abstract: A furnace system for the automatic, continuous and efficient ignition and combustion of pelletized or similar fuel. An electric-arc ignition means responsive to a thermostat is combined with a non-conductive refractory fire pot with air passageways on the bottom surface of the fire pot, two electrodes configured relative to said fire pot and a system control means, for controlling and sequencing the operation of the system elements. A system control means is also disclosed which de-energizes the fuel feed device if the temperature in the combustion chamber exceeds a pre-determined value, automatically re-energizes the fuel feed device once the temperatue falls back within acceptable levels, and which de-energizes the fuel feed device if the temperature measured in the combustion chamber falls below a pre-determined value.