Heating up water with electrical current
There is no inductive heating since water is not magnetic (in any working sense). So if only an insulated wire contacted the water there would be no current flow and no heating. So your story (if no wire contacts the water) is incorrect, but since power wiring panels have lots of bare voltage carrying conductors in them, I assume it's just someone got it wrong. 

Providing the water is impure enough to conduct there will be current flow and therefore heat generated in the water if the wires contact the fluid. Depending on the voltage available there is likely to be lots of heat and steam. There are many (mostly Chinese) shower and water heaters that use this very method, although it is potentially hazardous.