I read that teflon tape should never be used on the threads of a water
heater anode rod because it electrically insulates the anode from the
tank and prevents it from protecting the tank. But I recently bought a
State brand heater containing two anode rods. One rod screws in the
normal way, but the other hangs from the hot water outlet by a 1" piece
of plastic, and it's definitely insulated from the tank. So does this
mean that the anode doesn't have to directly contact the tank?