What happened to this water heater?

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Justfixit

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This 40 gal. electric Rheem water heater is only 4 years old. They called me because the tank was leaking. I've never seen one look like this. The lower element and thermostat almost look like they were on fire but the wires weren't burned at all. Can't tell if it's just from the water or if it actually did get too hot. Checked the electric and it was fine. You can see where the water was coming from but I refilled the tank (which was almost empty) and it wasn't leaking at all. Turned the breaker back on and the element started smoking. I can't figure out what happened. The top thermostat looks perfect. Any info would be great! It's still under warranty so I know Rheem is going to want me to explain what happened but at this point, I'm really not sure.

Thanks in advance!

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WorthFlorida

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Any evidence the T&P opened up? The water, either a leak or heavy condensation, is coming from the above the lower element and thermostat since there is rust above the thermostat location. It is possible it will only leak when the pressure increases as the water is heated. Did the customer complain of any scalding hot water? It could have been a runaway lower thermostat when the contacts rusted together and it never disconnected power, therefore, overheating. When copper gets too hot it turns a pinkish in color and it will be brittle. The T&P opens up at 150 PSI and 210º.
 

Fitter30

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With the rust spot on the sheet metal skin if there was a leak through the tank there would be a lime build up. Think the gasket for the element sprays water up on the tank and with a inspection mirror look on the inside of the tank skin. City water pressure usually goes up in the middle of the night and whole tank would up to temp.
 
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