Abstract: An apparatus and method to permit the burning of high and varying moisture content fuels without requiring supplemental fuel (oil or gas) firing. The invention provides in-situ drying of the high and varying moisture content fuels by modulating the temperature of the combustion air entering the furnace (11) of the vapor generator (10). The variable flow paths taken by the air and flue gas are functions of the moisture content of the fuel being fired. The flue gas may be selectively by-passed around an economizer (20) for direct introduction into a first air heater (30). The gas is then passed through a precipitator (34) and a second air heater (40). Combustion air is passed through the second air heater (40) and may be then apportioned between the first air heater (30) and a by-pass (60) around the air heater (40) before introduction into the furnace (11).