Regulating AC Voltage
simulate this circuit &ndash; Schematic created using CircuitLab
Figure 1. A step-down transformer arrangement.
In the arrangement of Figure 1 the secondary voltage can be subtracted or added to the mains voltage depending on which end of the secondary is connected to the live wire. Paying attention to the dot convention shown will result in a voltage reduction. 7 V is not a standard voltage but a 120V:6V transformer should be close enough. Power rating will be 7 V × 2.5 A = 20 VA minimum. I'd go for 30 VA or more.
The whole exercise seems suspect.

As commented 300 W is a heater, not a sensor.
118 V is within the normal variation of 120 V mains supply.
With the transformer arrangement offered here voltage will vary in proportion to mains voltage.

Constant voltage transformers exist. They (the ones I'm familiar with) use a transformer core with a small air gap and a tertiary winding with a capacitor. The combined effect is to give a fairly constant RMS output voltage although the waveform may be quite distorted.

Figure 2. A constant voltage transformer. Image source: Circuits Today.
I don't know if they come in &lt; 1 kVA versions.