Black soot/staining on electric water heater?

What would cause the black above the TPR on a electric water heater?

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Can’t be good.

I agree I would look for a loose electric wire connection that could be arcing .

Did you look inside the top T-Stat cover?

I did not look under any cover.

If it’s really humid where you live that could be a likely reason, especially with it being a hot water heater it would be easier for it to rust or stain with water or humidity so nearby.

Someone torched a new nipple in place…Just a guess.

That is funny !