3 valves are normal.
You should have one on a line going to the bottom of your water heater tank. This will be the cold water inlet.
Then there will be one on a line coming out towards the top of your water heater tank. This is the hot water outlet.
Then one valve on a line connecting the two lines. This is your bypass valve.
The valves are in the closed position when perpendicular to the water line and open when parallel.
To winterize, drain the hot water tank, close the cold inlet and hot outlet valves and open the bypass valve.
I hope this helps.