Rheem Hot Water Heater Condensation issues

Purchased new home with new Hot Water Heaters, one inside the home and one outside in the garage. Noticed water standing in catch pan when the heater stopped heating water on the inside heater. Contacted Rheem and because the heater was still under waranty, authorized a new heater and it was installed by a liscenced plumber. A few days later I noticed water standing in catch pan. Approximately 1/2 inch. Enough to keep the bottom of the heater wet. I called Rheem again and they told me heater was condensating. When I contacted plumber to let him know water standing, he came out and could not find a leak or any issues. Rheem is willing to replace heater again, but if water stands in pan again it is due to condensation and not a faulty heater. Is there a reason this is happening? I would like a resolution to the problem not necessarily a new heater. The plumber I have hired to take care of my issue states that in 35 years he has never seen or heard of the heater condensating like this. Another plumber stated that if I turn the heater up (hotter) it would stop condensating. I just need the right answer to resolve this problem.

I'm assuming that this is not a power vent type heater, just a run of the mill type.

A picture would likely help. The questions are where is the water actually coming from and when? Is it coming from the stack? Is it coming from the T&P relief valve? Is it coming from a water line connection? Or is it coming from inside the central flue or combustion chamber of the water heater?

Why is water being allowed to stand in the catch pan at a level that is getting the water heater wet? Doesn't sound like a good installation to me.

My first guess is that this is actually a thermal expansion issue. Is the T&P set up to overflow into the pan? If so, then it is easy to determine if it is leaking. If it isn't leaking constantly then check to see if it is relieving because of pressure spikes due to thermal expansion. It would be best to put a ~$10 test guage (with a max pressure indicator) on a hose bib during testing and overnight. All you need to do to see if it is relieving during thermal expansion is to do a long hot water draw such as filling a tub, then allow the water heater to recover. While the tank is in heating mode the pressure will rise and if there is not some sort of thermal expansion tank or other relief, it will hit about ~150 psig and the T&P valve will start dribbling excess volume. If you see this, the issue is that a thermal expansion tank is needed (or that an existing one has failed or needs its air pre-charge reset.)

Hearing this described as "condensating" is a red flag to me if it is coming from the plumber's description. It is not a normal technical term and might be an indication that the plumber is a bit weak on understanding...or not. If you are in SW Texas I assume you are across the dry line and don't have much humid air. As such this would make condensation in the stack itself less likely. To get that you need warm humid air to be coming into contact with cold walls in the stack. With double wall stacks and the heater running this is unlikely. Some sort of air infiltration or backdraft might cause some drip down the stack. This is more typical on the outside of uninsulated AC ducts running through humid unconditioned spaces.

Condensation on the chimney/combustion chamber walls will happen when tank gas water heater is cold and is first fired up, but it only last a few minutes. This can be observed through the flame inspection window--I've seen this. Water can drip down on the burner and make the flame turn yellow until the tank walls warm enough that the condensing stops. One would have to be running the tank really cold and doing full draws regularly to accumulate water in the pan this way.

My bet is also the T&P valve relieving pressure because of a closed supply system and either a failed or non-existent expansion tank. The pressure gauge with the tattle-tale hand will tell. A big WH on a full draw-down, that then gets reheated and easily discharge a cup or more of water each time it cycles like that if there's no place for expansion.

To get that much water from condensation would be unusual. Now, if you're having monsoons, it could just be a very poorly flashed flue and what you're seeing is rainwater, not condensation or a discharging T&P valve.

Bit late on this, but it's almost certainly the thermal expansion problem. Water heaters do not condense moisture. There's nothing wrong with the heater. Put in a thermal expansion tank and you'll be just fine.

Condeansation ONLY occurs when humid air contacts a surface which is cooler than the dew point of the air, which SELDOM happens in a water heater. The one time it occurs is when a gas heater is first started or all the hot water has been used so the tank is full of cold water. THEN, the combustion gases will condense water out, but it usually too small of an amount to be noticeable. You must have a thermal expansion problem and a poor plumber who does not know how to diagnose it. It is IMPOSSIBLE for an electric heater to "condense", as well as the tank of a gas heater, because both of these are insulated so humid air CANNOT reach the metal tank.