We were dispatched to a report of wires arching beside the local used goods store. The Thrift Store is a steel bow trussed one-story masonry constructed building, with a heavy fire load, of clothing and other household materials. Upon arrival the Chief gave a size up of wires down on the ground and arcing, on side 2 of the building. He had dispatch upon arrival call for mutual aid and the power company to control the electricity. I was the officer on the first due engine, manned with 4 firefighters. We staged on the street in front of the building. Command directed us to make entry into the building using the back door on side 4, and check for any problems. The engine crew and I entered the building and we looked through two rooms not finding any signs of fire or other problems. In the back corner of the second room we found a doorway leading into a restroom and break room area. When we entered the area we could hear what sounded like running water coming from the restroom. We then looked in the restroom and saw water spraying out of a copper fitting on top of the water heater. It was determined that the water heater was gas fired and not electric. I gave the order to turn off the water to the water heater if possible. While the crew was doing this I looked in the break room and found an electric breaker panel and checked the surrounding walls with the thermal imaging camera and found no hot spots. I returned to the crew who was just getting the water shut off. After this had been completed we began to leave the restroom to search the rest of the building, when the restroom lit up in a bright blue glow and a loud humming sound. I shoved the crew into the second room and called command to advise him of what had just occurred. I advised him that the smell of smoke was getting stronger and that there appeared to be an orange glow in the restroom. I also advised command that we had a possible fire in the ceiling. We were advised to stay out of the room until the utility company cut the power. Additional crews were assigned to the interior to check the rest of the building and a line was advanced into our area. Once the utility company cut the power at the pole and the OK was given to enter the room, we entered to check for fire and we found no signs of fire. We pulled off the ceiling light cover and pulled down the water heater exhaust pipe. There was no sign of charring, the supports on the exhaust pipe however did show signs of charring and the fitting that was leaking looked like it had been burnt with a torch. After further examination it was determined that the arcing occurred in the area of the fitting. A possible reason for the arcing was thought to be from a ground wire that was attached to a water line. We have learned that the obvious metal items may not be our only hazard on calls for wires down. We tell our firefighters to be careful not to come in contact with chain link fences and metal siding. We are now going to be more cautious around plumbing or any other metal items coming out of the ground.