I have no experience with water heaters, but most of the folks I know in cold country do as Zero Cool does.

In TN, when it got around 4 degrees, I would also tote a 5-gal container of WARM BROTH for the dogs, every morning and evening, which they accepted with relish.

I got a brand new 5-gal plastic kerosene container (unused of course), and I would put 1 chicken bouillon cube at the bottom, and then fill it up with VERY warm water from my bath tub. Then I would take it around the yard and give maybe 2-4 cups of water (whatever they would drink their fill of) ... and the heat warmed them up, while the slight smell of "chicken" made them drink their fill of it.

Again, doing this morning and evening resulted in at least two "drink till I am full" opportunities for the dogs. Also, make sure that their house openings are VERY SMALL, so they have to squeeze their way into it, that way less cold air comes in. And, naturally, that their houses are packed with straw.

Jack