Q ~ Is it essential to use sodium hydroxide (lye)?

A. Yes.  
If lye is not added as a catalyst the ER HyZor won’t produce gas because pure water has far too high an electrical resistance.
Electrolyzers use a catalyst to lower electrical resistance.
  We’ve tested many catalysts and discovered (for our electrolyzer design) the most practical catalyst is lye.
It has the best balance of user safety, low cost, ready availability, high efficiency, environmental friendly and electrolyzer component compatibility.  
By definition a catalyst is not consumed in the chemical reaction, so the first ‘charge’ lasts the life of the electrolyzer.
Put it in only once, and then always add pure water when the electrolyzer liquid level is low.