It’s a factor/ calculation on the total load of an appliance vs how often it runs at max capacity
Load diversity factor when dealing with fuel gas relies on the correct definition of "diversity" and interpretation of such. It is different from say in residential electrical lighting, where there is a reduction to the total volt ampere count based on the prediction that not every single fixed lighting device in a home is likely to be energized at the same time. Yes, it is possible, and if it does happen, there is minimal risk of damage to equipment, and there is nearly no safety hazard created by this unlikely, but possible event.
On the other hand, when dealing with fuel gas, mainly utility supplied natural gas, if a condition is created such that gas appliances do not have the minumum required pressure (resulting in inadequate volumetric flow)on the supply side of the appliance valve/regulator, particularly with higher demand appliances such as....direct vent, draft induced, condensing, forced air furnaces, or forced drafted, 125K Btu/hr + swimming pool heaters......bad and expensive things start to happen fast and aside from all of the hazardous incomplete combustion products, the heat exchangers soot quickly which impedes heat transfer, and soon after the most expensive part of those machines are headed to the scrap yard. And lets hope the one in the furnace didn't develop a micro fracture during the anomilous burn, because, due to the the pressure inadequacy being breif and temporary (another gas appliance's combustion cycle ended around the same time this one did) and the older control board's gas inlet pressure lockout switch didn't lock the thermostats next call for heat out, the unit is going to try to now operate properly with the now correct inlet pressure, but the exchanger is covered in soot, heat is not being transfered at the proper rate, and the flame properties are not correct. So how long does it run before the limit switch kills the burn on the next few cycles.....long enough to get the occupants noticbly poisened, or just enough to give them a slight headache if they happen to be home.......Now CO alarms aside, these instances are few and far between, but do happen, and have gone on for years before the occupants were extracted from their nightmare of a multitude of debilating, but not fatal medical symptoms, that have a non-obvious causation.
Installing pool heaters, meter capacity issues arise all the time. Changing a meter set is not neccessarily a small job. Probably no excavation required, but depending on when, and supercedingly IF, the gas supplier replaced their older iron residential mains with PEX or Polyamide, will determine if there is a service line shutoff valve at the main or not. If there is not, at least the companies where I am at, say they have to shut down the residential main for a couple blocks if the new meter size requires a larger service shut off valve. Now as I understand it, all newish meter sets 200 Scfu and larger are rated for any inlet pressure up to 2 psig, probably more, but no urban residential, even large lot, will not have a demand beyond what a 2 psig supply pressure can supply.
If the customer says no to a slight pressure increase up to 1/2 psig/14"WC, because they think the cost of the regulators, and accompanying unions, valves, and the labor for installing such is too much, I tell them I cannot install their pool heater until they have a larger capacity meter installed. They say, "But we never use the gas fireplaces in the summer time, that keeps us within our meter capacity......we won't run the fireplaces when the pool heater is on....."
I then think of the "Diversity Factor". Does it apply here? I think all local regulators should clarify for their specific climate zone what appliances and their load's can be rated with this factor. I do not include indoor gas fireplaces as a diverse load demand, it is too easy for the customer to flip a toggle switch on a cool summer night when watching a movie with their date, wife or what have you. I do include centralized heating equipment and boliers as if they wanted to......no....nevermind.....anyone with the financial resources to be having a pool heater installed is intelligent enough that they will not, and most cases cannot, run their furnace or turn on their radiant floor heating and their air conditioning at the same time. There is some gray area in the months of April (average local temp 51 degrees F), May, September, and October, especially at night.....that is where conditions of a contract come in. If it is close, right at the rated meter capacity, but the gas pressures are staying within the pool heaters specified range on the inlet side and the manifold side of the heater, I have them sign off oon an additional unconditional acceptance of my condition that they will not operate their furnace or boiler and the pool heater simultaneously. With this added contract language, and the fact the meter can handle a a tad bit more than its plate rating in most cases, I at least feel like I am protecting us as a company.
But back to the example.....The customer with the indoor fireplaces then gets the price from the gas company for a larger meter set, and then they call back and OK the installtion of a dual pressure system. Any pipe size issue can be solved with even just slight service pressure increase.....it is not like it is 2 psi or nothing. In fact, we have never had to request anything over 14" WC, which in my opinion is still considered low pressure, and does not require the purchase of regulators with the factory installed overpressure protection devices, at least in the local code bodies and the gas companies we work with. Gas utilites are glad to be able to offer many pressures in between the two, and if one does their homework, properly prepares and performs a solid, compliant installation and flows with schedule the inspector and the utility jive too.....the customer in most cases can keep their same 225 or 250 Scfu meter set, have a couple valves, regulators, and unions put in (assuming their piping, equipment, and appliances are all in compliance when arriving), and have a safe, efficient, dual pressure fuel gas system for a relatively and comparably low cost without having to go to larger meter.
