Hello my hot water heater smells like burning plastic what do I need to do

This could be bacteria growing in the tank or a failed sacrificial anode "stink rod" inside the heater. This is sometimes woresened by an affected water softner. Read this How to get rid of rotten egg smell in softwater | eHow.com

Mine smelled like burning plastic (not electric). I took off the cover (upper element) and discovered that the insulation was melting off the thermostat lead, hence melting some of the plastic cover as well. Replaced the thermostat.