What would cause the hoses on top of an electric water heater to spark and the copper hose running down the side to get hot. We have a fairly new hot water tank that is an energy saver and are on the electric companies timer. This morning the water heater would have been on the off heat because it was the time the electric company had control.
Your description indicates a major problem somewhere. The electric company may just break one side of the power supply to control the usage. If so, the live side can cause those symptoms. Have a good plumber or an electrician check the unit. I could tell you horror stories of water heaters that had similar symptoms.