Water heater replacement (Somerset)

I have a dying 50 gal tank gas heater. I called PSEG for a quote and they told me $2339 for a 12yr warranty unit, $2039 for a 10yr, and $1839 for a 8yr. In your experience, how was the PSEG service and how much difference do these warranty tiers make?

The quote also only includes installation, disposal, and labor. They said I need to do permits and inspection separately. Anyone know how I go about getting those done and how much that would cost roughly?

Any other advice would be appreciated...this is my first home and the first time I've had to do any work that wasn't purely cosmetic.