Permanent removal of the anode rod is not an acceptable solution, since that would leave the water heater without it's second line of defense against corrosion, and will void tank warranty. Examples of water heating systems often low on dissolved oxygen are long standby periods, and municipal water systems with large reserves and low flow conditions. In fact, it is very unusual for today's high quality glass lined tanks to have a lining failure significant enough to allow water to contact enough bare metal to discolor the contents of even a small tank. The most common cause of rusty water is iron reducing bacteria called Leptothrix. Iron bacteria are commonly found in soil, water wells, water treatment plants and water distribution piping systems where soluble iron exceeds 0.2 parts per million.
Higher levels make conditions even more favorable.
Soluble iron in the water provides food for the bacteria. Rusty or discolored water is the result of a bacterial feeding process. Laundry, tableware, and plumbing fixtures can be stained if the condition is left unchecked. The affected water can be red or brown, and may have a black sediment. Heaters and tanks with extended iron bacteria infestation may require more than one treatment.