This is not an "overflow". It is a Temperature/pressure relief valve. Sometimes they leak with age or build up solids in valve preventing them from closing completely. This is the single most important safety device on your water heater. If one of the thermostats is malfunctioning, the TPR valve will relieve. If the pressure rises too high, it will also relieve. You can replace the valve, but be sure it is the same temperature and pressure rating. You will need to turn the water off and drain some of the water prior to removing the valve. Don't forget to reinstall the down pipe that directs floor to floor or drain. If a new one leaks also, suspect your temperature control. Water heaters can be bombs if the safeties are not working properly
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