The wrong wire was used to install this water heater. These require a 2 hot and a ground, usually a #10, depending on capacity. This is a 3 hot with ground so the white wire is not uses/not needed. Just put a wire nut on it and stuff it into the junction box. Just to be safe, make sure the white wire is also capped of in the breaker panel, not on a neutral bar or breaker. BTW, why do you need a water heater if the water is already hot, get it, "Hot water heater"