A stable and efficient variant of the dynamical fluctuating charge (fluc-q) model for electronically polarizable molecular dynamics (MD) simulation is developed and applied to electron transfer (ET) reactions in water. The energy divergence problem often encountered with the original form of the fluc-q model is essentially removed by introducing an alternative functional form for the electronic self-energy term of hydrogen atoms without any additional parameters. In the application to the aqueous ET problem we find the following: For the present donor-acceptor (DA) model of moderate size, the induced dipole is slightly smaller in the first solvation shell than in the outer region even under the electrostatic field from the ion pair state of the DA, which suggests that the induced dipole is enhanced more in the solvent-solvent hydrogen-bonding structure. The structural aspects are also examined via radial distribution functions. The solvent reorganization energy is demonstrated to be renormalized, both in the magnitude and in the slope along the inverse DA distance, due to coupling with electronic polarization. In the time correlation and spectral density functions of the solvent reaction coordinate, the frequency of the librational coupling motion is slightly blue-shifted and its intensity is suppressed due to inclusion of the solvent electronic polarization. The impact of the electronic polarization on the scaled quantum energy gap law of the ET rate is found to be modest.