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an electric water heater in a closet has a drain pan that is filled up with water is the normal or should the water just drain through the discharge pipe to the drain.

Nothing that you have asked about is normal.

First the "discharge pipe" I assume you mean the Temperature Pressure Relief valve drain line should terminate at an appropriate drain, not inside the drip pan. Some areas prohibit dumping the TPR into the drip pan (all should prohibit the practice IMHO.)

Then, why is there any water discharging from the TPR? The only time water should discharge from the TPR is when testing or in the case of a malfunction, which means unless you have been testing it recently, there is more wrong than just the place the pipe is terminated. If the drip pan has water, there is something wrong.

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the Temperature Pressure Relief valve drain line should terminate at an appropriate drain, not inside the drip pan. Some areas prohibit dumping the TPR into the drip pan (all should prohibit the practice IMHO.)

Jim, want to tell us why the drain pan should not take discharge from the TPRV? It is the closest destination for discharge.

The only time water should discharge from the TPR is when testing or in the case of a malfunction.
Correct. No harm in a dry pipe terminating where it is visible.
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I personally don't like the TPR dumping into the pan because of the confusion likely when the TPR drips into the pan. Is it the TPR or the heater leaking? Also when the TPR is tested, the heater is usually sitting in a small amount of water long enough to cause rust. (everyone does test their TPR regularly, right?)

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