It's the water heaters expansion valve. They do drip from time to time but if it gets to be excessive then they can be replaced.

Excellent, thanks Ray. I feel much better knowing it's not an urgent repair.

Lisa,
In my experience, just releasing a bit of hot water from the tank is enough to clean off the valve seat. Simply lift the lever a bit (it is spring-loaded), and let out some water. It's hot, so be careful. For safety's sake, turn off the electric heater element while you do this, to be sure the element doesn't get exposed if the tank level got too low. The dripping should clear up right away, but if not, try it one more time. If that doesn't work, it may be time for another pressure-temperature valve.

I had a similar experience with this valve. My problem was the temperature sensor was not properly seated against the tank. Once I clipped it back in place I have not had any issues since.

Another thought is lack of room for expansion - when I added a pump expansion tank my drip stopped as there was now room

I my opinion it’s not wise to open/exercise the expansion valve or a pesky leak might begin. It happened to me and I had to replace the valve to stop the leak.

When it gets work I'll do that, it looks easy enough. Thanks!

The valve is easily placed at home. this valve can also be used to bleed off air . Just make sure you have the right pressure valve.

One more thing to consider, if you are not using a pressure regulator on you city water hook up, your water pressure could be higher than normal. With a back flow preventer, preventing water to escape the heating/expansion process, it can only escape through the expansion valve.

I am using a pressure regulator. Thanks.

Will do thanks.