I have an old hot water heater (17yrs) in a closet on the second floor of my home. I feel I should replace it. One plumber said I did not need to install an emergency water shut off valve with the new heater. Istead to just get a battery powered water sensor alarm to detect a leak. What is your suggestion?

Jim,
I would replace the water heater asap, and, install it in a sturdy drain pan with a gravity drain pipe ( minimum 1" ) routed to the outdoors if possible. Connecting an alarmed sensor is an option, but, that will only be a benefit if someone is there to hear the alarm and manually shut off the water supply to the heater.
We install a lot of water heater drain pans, and always try to connect a gravity drain pipe. When a gravity drain is not possible, we will install a moisture sensing, cold water supply, automatic shut off device...........

Hi Jim!

I also think you should replace it, and I would also install an automatic water and gas shutoff valve with a sensor in a new pan. With newer water heaters being built to last, in most cases, 10 years or less, you need to look at the long run and protect your home... an auto. shutoff is really the only way to guarantee that your home CANNOT become flooded from the second floor! Pans with gravity drains are fine, but if the water heater was to leak full bore (major leak), a pan can only hold so much water, so the auto. shutoff really is best solution. The nice thing, too, is that the auto. shutoff valves are reusable in most cases! There is a little maintenance required for these auto. shutoffs... let me know if you want to discuss more, OK?

Mark