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I have a brand new 40 gal rheem water heater that I am installing in a few days. Anyway the drain pan for the heater has the standard pipe that connects to the outside edge. This in turn drains thru the floor or wall of your choice in case of a leaking unit / failure.

Now in the bottom of the new drain pan is a spot to drill a hole for the relief valve I assume. My question is do i need to drill that hole or is the pan drain sufficient for the relief of the water heater?

I hate to cut that pan if I don't half to...
Then again if it will help stop the floor a drywall from getting soaked I will.

Whats the right way guys?

No need to cut the pan. The relief valve needs to be plumbed separately to a place where the discharge of hot water under pressure will do no harm, ie: through the floor and belly wrap into the crawl space. You will need two holes through the floor or wall. One for each drain. You don't want the relief to go into the drain pan at all.

I know most just plumb through the floor into the crawl space...but!

I had to go under the house for something....and could hear water sounds. Turns out the relief valve was leaking....and who knows for how long. Of course it is just pvc...so I added on to it to so that it exits through the skirting. Didn't take much.

Thanks for the info people. I'm glad i asked because i really want it correct. Mark I hope you like it in Anna, my son loves it. Maybe not the ride into Dallas every day but Anna for sure.

Add a couple of elbows & straight lengths so the relief drains outside the Skirting.