Some local codes require a unique fitting on water heaters connected with copper pipes, known as a bonding wire. This is a requirement by code in New Jersey and some other local codes across the country. It is not required by the National Electrical Code, but many plumbers will install a bonding wire (sometimes called a jumper wire) even when it is not required. The bonding wire is usually a heavy copper wire (such as #6 stranded) fastened with brass clamps at one end to the cold water pipe and at the other end to the hot water pipe. The parts cost only about $10 and can be installed in just minutes.
There is some argument over the need for a bonding wire, considering that few building codes require it. Those that advocate their use lean on one of two lines of reasoning.
One reason a bonding wire is installed is as a means of preventing the electrolysis that can occur when dissimilar metals are joined together. When a water heater is connected with copper piping, the union where the copper meets the steel fittings on the water heater is subject to a slight electrical potential that can accelerate corrosion. The bonding wire is intended to allow that faint current between the water pipes to bypass the copper-to-steel fittings and thereby prevent corrosion caused by electrolysis.
For code jurisdictions that require the bonding wire, and for plumbers who routinely install them, one reason cited is that the bonding wire will help reduce corrosion of the pipe fittings and interior parts, such as the anode rod.
It should be noted that no electrolysis can occur if the water heater is connected with PEX or any non-copper plumbing pipes. Corrosion prevention is not a reason to install a bonding wire if you have non-copper pipes.
Plumbing System Grounding
Another school of thought is that the bonding wire helps to complete the electrical ground of the entire plumbing system. Metal pipes are required by code to be electrically grounded, and this is normally done by grounding the cold water inlet pipe to the home. The water heater creates a break between the cold water pipes and the hot water pipes in the home. By bonding the hot water pipe to the cold water pipe at the water heater, it is thought that this helps to ensure that the entire plumbing system will be electrically grounded.
It should be noted that the National Electric Code does not require a bonding wire on a water heater. The reasoning is that the metal casing on the water heater itself is thought to be sufficient to complete the continuous grounding path between the cold water and hot water pipes in the home. Still, there are electricians and local building codes that vigorously defend the water heater bonding wire as a proper safety measure.
For some building inspectors, the presence of dielectric unions on the copper pipe fittings on the water heater means there MUST be a bonding wire installed between the hot and cold water pipes. Dielectric unions are special fittings used where dissimilar metals are connected, intended to prevent corrosion caused by electrolysis. Since the dielectric union breaks the path of metal continuity and thereby interrupts the grounding path, the bonding wire serves to reestablish the grounding of the entire plumbing system. Note that a plumbing system with PEX or other forms of plastic water supply pipe does not require any kind of electrical grounding.
In the final measure, it's always best to follow the guidelines of your local building code as regards the installation of a water heater bonding wire. If you are installing a water heater yourself, the bonding wire may add some corrosion-prevention virtue if the water heater is connected to copper plumbing pipes. The bonding wire may also help establish a continuous electrical rounding pathway to all the metal plumbing pipes in the system.