Final answer:
The flow-through valve is the valve on the Type III hydrant system that modulates open to allow fuel to pass through during a defuel operation.
Step-by-step explanation:
In a Type III hydrant system, the valve that modulates open to allow fuel to pass through when returning to the operating tanks during a defuel operation is the flow-through valve.
The flow-through valve is designed to allow the fuel to flow continuously from the lower valve to the upper opening, flushing the ballast tank with 300% of its capacity.
During a defuel operation, the flow-through valve is activated to enable the fuel to return to the operating tanks, ensuring proper fuel management and preventing fuel spills.