My existing hot water heater iss vented through my chimney with 6" pipe fromthe factory and 3" pipe o the new hot water heater that was recently installed. This is the only appliance vented in the chimney. Is there a way to cap off the existing 6" pipe without installing a new 3" pipe ventilation pipe through the chimney. The heating contractor wants $300 to do this. My problem is condensation coming down through the existing pipe.

 

Not only do you have a problem but a problem that could be life threatening. You probably installed a high efficiency water heater that is great. But the vent gases are not as hot as they once where with the old heater consequently you don't get a good hot draft up the old chimney. Not only do you get condensation but you are probably getting carbon monixide back drafting down this vent. Carbon Monixide is a Killer. The condensate is also highly corrosive and it will eat your chimney up allowing leaks of both condensate and carbon monixide into areas you don't want. Your only choice is to have the chimney resized properly. If your house doesn't have a carbon monxide detector get one they are as valuable as a smoke detector. The heating contractor should have explained this to you if he didn't I would recommend you get another. I apoligize for the length of my answer.