SteveB: Our Hughes Autoformer is hardwired in place all the time. I'm sure you know that if the voltage is high enough, its just a pass through unit and it doesn't even work. But only kicks in when voltage drops to a near danger zone.
As for the electric water heater theory, I've never hear of that but my Hughes was bought used nearly 9 years ago and with no instructions or manual. We do use our electric water heater with is as well as any other appliances in the mH.