System and methods of operating a water heater receiving power from an electrical grid. The water heater includes a heating element, a controller, and a first control circuit. The first control circuit including an energizing terminal and a microprocessor. The method includes connecting an energizing terminal of the first control circuit between a power output terminal of the controller and the heating element, receiving driving power from the controller based on a temperature signal. The method also includes receiving a control signal from the controller based on electrical grid information, and selectively energizing the heating element, by the microprocessor of the first control circuit and through the energizing terminal of the first control circuit based on the control signal.