Technician arrived and customer explained that over the past week her husband had noticed the floors in the downstairs powder room were wet, as well as the floor being wet in the closet with the water meter on the other side of the wall. Tech checked all fixtures in the powder room. Finding only a small drip on the lav sink cold water shut off valve. Upstairs all fixtures were running properly and leak free except for the lav sink cold side as well. Tech asked customer to look at the Appliances in the utility closet, finding that the hot water heater had water coming out of the cold inlet as well as the hot inlet underneath the jacket. The water had pooled up on the top, dripped down the backside of the tank, and was flowing underneath the powder room and the water meter closet. Customer was made aware and tech offered to replace the hot water heater, however the customer declined and explained pseg was going to replace the unit under warranty .