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2020 NEC emergency disconnect requirement

stickshift

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2020 NEC requires an emergency disconnect on the exterior. Most houses in the northern states have the main panel inside. If they have an emergency disconnect on the exterior, does that turn their main panel into a subpanel and thus require SE cable with a ground to the main-turned-sub-panel?

Or does a simple disconnect without overcurrent protection not affect the main panel's status, and it stays a main panel and requires only SE cable without ground?

What's the easiest way for homes with main panels inside to comply with 2020 NEC - a disconnect built into the meter pan?
 
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reader2580

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I just went through this. Milbank makes a meter base with 200 amp disconnect switch already installed. I did not use the Milbank base with switch installed due to how my utility feed comes in.

I used a Square D 200 amp disconnect switch and a Milbank meter base both from Home Depot. The outside disconnect in most cases will become your service disconnect. This means the neutral and ground bonded at the service disconnect and the main panel becoming a subpanel with grounds and neutrals separated. That is what my local inspector required.

As more states adopt the 2020 NEC I expect to see more equipment designed to meet the emergency disconnect requirement.

My local inspector stated that even a panel replacement will now trigger the requirement for the emergency disconnect. I expect a lot more electrical work will be done unpermitted in areas with inside breaker panels to not have to install the emergency disconnect.
 

wyliesdiesels

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2020 NEC requires an emergency disconnect on the exterior. Most houses in the northern states have the main panel inside. If they have an emergency disconnect on the exterior, does that turn their main panel into a subpanel and thus require SE cable with a ground to the main-turned-sub-panel?

Or does a simple disconnect without overcurrent protection not affect the main panel's status, and it stays a main panel and requires only SE cable without ground?

What's the easiest way for homes with main panels inside to comply with 2020 NEC - a disconnect built into the meter pan?

yes. every panel past the first means of disconnect is considered a subpanel and requires an isolated neutral bar(s) and 4-wire feeder
 
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stickshift

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yes. every panel past the first means of disconnect is considered a subpanel and requires an isolated neutral bar(s) and 4-wire feeder
Right, that's what I would have thought.

So you're saying it doesn't matter whether or not that first disconnect has an OCPD?

From the 2020 NEC below. Note the distinction they make between "service disconnects" and "emergency disconnects". In particular, meter disconnects should be marked as "EMERGENCY DISCONNECT, METER DISCONNECT, NOT SERVICE EQUIPMENT".

230.85 Emergency Disconnects.

For one- and two-family dwelling units, all service conductors shall terminate in disconnecting means having a short-circuit current rating equal to or greater than the available fault current, installed in a readily accessible outdoor location. If more than one disconnect is provided, they shall be grouped. Each disconnect shall be one of the following:

(1) Service disconnects marked as follows:

EMERGENCY DISCONNECT,

SERVICE DISCONNECT

(2) Meter disconnects installed per 230.82(3) and marked as follows:

EMERGENCY DISCONNECT,

METER DISCONNECT, NOT SERVICE EQUIPMENT

(3) Other listed disconnect switches or circuit breakers on the supply side of each service disconnect that are suitable for use as service equipment and marked as follows:

EMERGENCY DISCONNECT, NOT SERVICE EQUIPMENT

If the meter disconnect is "not service equipment", then the breaker panel behind it is the first service equipment - should that be considered a subpanel? That doesn't sound right to me (but I'm just a DIY'er).
 

jkeyser14

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What is wrong with just pulling the meter like firefighters or electricians normally do? Does that not count as a disconnect?
 
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stickshift

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What is wrong with just pulling the meter like firefighters or electricians normally do? Does that not count as a disconnect?
The whole point of the change is risk reduction for firefighters (in addition to increased profits for electrical equipment manufacturers, which seems to be a requirement for any code change). A disconnect eliminates possibility of arc flash.
 
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reader2580

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What is wrong with just pulling the meter like firefighters or electricians normally do? Does that not count as a disconnect?

The local fire department won’t pull meters any more for safety reasons. They call the utility to turn off power if they can’t get to the inside breaker panel.

I talked to the fire chief about my solar panel install a few years ago and pulling meters came up.
 
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stickshift

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Note that this applies to new work, you don't have to retrofit existing services. Also, only six states so far have adopted the 2020 NEC - most are still using the 2017 version (and some are still on the 2014 or even 2008 versions.) The NFPA has a map on their site showing which states use which version. https://www.nfpa.org/NEC/NEC-adoption-and-use/NEC-adoption-maps
All correct. For someone upgrading their service in jurisdiction on 2017 or older code, it's still worth considering. No real cost difference, but you get benefit of potentially quicker firefighting response because they can disconnect power quicker, and homeowner has ability to kill power to their panel.
 

wyliesdiesels

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Right, that's what I would have thought.

So you're saying it doesn't matter whether or not that first disconnect has an OCPD?

From the 2020 NEC below. Note the distinction they make between "service disconnects" and "emergency disconnects". In particular, meter disconnects should be marked as "EMERGENCY DISCONNECT, METER DISCONNECT, NOT SERVICE EQUIPMENT".



If the meter disconnect is "not service equipment", then the breaker panel behind it is the first service equipment - should that be considered a subpanel? That doesn't sound right to me (but I'm just a DIY'er).

correct. code states the first means of disconnect. and you dont want a neutral bond in 2 places so its at the first means of disconnect.

What is wrong with just pulling the meter like firefighters or electricians normally do? Does that not count as a disconnect?

many fire departments, including mine, will no longer pull meters. They wait for our local PoCo to disconnect the drop who then pulls the meter.

Ever heard of arc flash when pulling a meter? :shocking: :FIREdevil It happens and has injured people before.

The problem when pulling a meter is there could still be a load running through it. Pulling a meter does not shut the load off before the meter comes out of the jaws. And The meter does not contain the arcs between the meter jaws. Only a disconnect or OCPD can do so.
 

acer66

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I know that does not apply to old construction but I am curios.
I have an exterior meter box with a 200A main breaker in it.

Does that mean if I label it correctly as emergency disconnect it satisfies the code?

The detached garage is also powered through that panel, would that need its own emergency disconnect?

Since we are kinda on the topic, can the meter with the emergency disconnect be still locked with a pad lock?

Thank you.
 
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stickshift

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correct. code states the first means of disconnect. and you dont want a neutral bond in 2 places so its at the first means of disconnect.
Got it, thanks.

So in the very common setups in the northern states - main panel inside which also serves as the disconnect - if going to a meter disconnect, you'd have to run a ground in SE cable from meter to main-turned-subpanel, and need to unbond ground and neutral in that panel. And I guess that means any ground wire from main panel to ground rods has to be moved to the meter disconnect.

The 2020 code wants that meter disconnect labeled "NOT SERVICE EQUIPMENT". Is that because there is no OCPD there?

What does this mean for generator interlocks? Since no OCPD at meter disconnect, can the interlock breaker be located in the first subpanel (former main panel) fed from the meter?
 

wyliesdiesels

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Got it, thanks.

So in the very common setups in the northern states - main panel inside which also serves as the disconnect - if going to a meter disconnect, you'd have to run a ground in SE cable from meter to main-turned-subpanel, and need to unbond ground and neutral in that panel. And I guess that means any ground wire from main panel to ground rods has to be moved to the meter disconnect.

correct. you would need to either refeed the now subpanel with 4-wire SER, pull a 4th wire if in pipe, move GEC and any bond wires to new disconnect, isolate neutral bar (might not be possible), and move any ground wires on neutral bar to new ground bar.

The 2020 code wants that meter disconnect labeled "NOT SERVICE EQUIPMENT". Is that because there is no OCPD there?

What does this mean for generator interlocks? Since no OCPD at meter disconnect, can the interlock breaker be located in the first subpanel (former main panel) fed from the meter?

Thats a quandry. Id have to read the CMPs notes on why they mandated a label that says "not service equipment".

The definition of "first means of disconnect" is what puts this in a quandary

That's it in a nutshell.

My concern is trouble-making kids running through neighborhoods yanking disconnects just for kicks.

People often bring up this hypothetical scenario, however out here in california, where every house and building has a main disconnect easily accessible on the outside of the house, that scenario never happens.

the hypothetical could happen with the gas and water meter as well in most cases but doesn't. Ive never heard of it...
 

tarmy

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That's it in a nutshell.



My concern is trouble-making kids running through neighborhoods yanking disconnects just for kicks.

Or people wanting to kill camera and security systems...or to see if anyone comes out to see what happened and are exposed...
 

AntonLargiader

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Where does it say first means of disconnect? Everything I see refers to service equipment and service disconnect. If the new code mentions a disconnect that is specifically labeled "Not service equipment" then I think the intent is pretty clear.
 
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stickshift

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I just went through this. Milbank makes a meter base with 200 amp disconnect switch already installed. I did not use the Milbank base with switch installed due to how my utility feed comes in.

I used a Square D 200 amp disconnect switch and a Milbank meter base both from Home Depot. The outside disconnect in most cases will become your service disconnect. This means the neutral and ground bonded at the service disconnect and the main panel becoming a subpanel with grounds and neutrals separated. That is what my local inspector required.

As more states adopt the 2020 NEC I expect to see more equipment designed to meet the emergency disconnect requirement.
Yeah, I would guess there's not a lot of this equipment around, since prior to 2020 NEC, residences in northern states didn't have outside disconnects, and southern states I guess use meter-main combos. And I can't see northern states going the route of putting their panel outside, so a meter-main isn't going to be widely adopted.

So a meter with disconnect-only is a solution for a problem that didn't exist until 2020 NEC.

Why weren't southern states doing something like this all along? Meter + disconnect outside, panel inside? Why subject the breakers and romex to the temperature fluctuations and increased risk of moisture unnecessarily?
 
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reader2580

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So do crooks...hell, they steal cats in less than a minute.

There are easier ways to cut power to the average house. Just cut the wire seal on the meter and pull the meter. Nobody seems to care that pulling a meter is an easy way to kill power.

Remember, most thieves are looking for an easy score. If you have security cameras they'll probably move along rather than cut power to the building. Anyone who has security cameras and is concerned about the power being cut should have a UPS or other battery backup on their security system.

Thieves are unlikely to take extraordinary measures to break in a residence unless they know you have valuable stuff that is easy to turn into cash. People always mention thieves can use a chainsaw to get into about any wooden building, but no thief is going to take that kind of time without knowing there is a reward for the risk.
 

walrus

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People often bring up this hypothetical scenario, however out here in california, where every house and building has a main disconnect easily accessible on the outside of the house, that scenario never happens.

the hypothetical could happen with the gas and water meter as well in most cases but doesn't. Ive never heard of it...

Losing your power in Maine in winter is totally different than losing it in California. Some kid shuts it off and your gone for the weekend, ruined house. I think a padlock takes care of that issue.

One thing good about outside disconnect is generator installs.
 

AntonLargiader

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Why weren't southern states doing something like this all along? Meter + disconnect outside, panel inside? Why subject the breakers and romex to the temperature fluctuations and increased risk of moisture unnecessarily?

Our 1930 house has had a meter and outside disconnect for decades, possibly since service was upgraded in the '60s. Our neighbor, same age house, same thing. Next to them, 1935, inside panel no disconnect. Other neighbor, 1984, outside disco. Most other houses in that '80s neighborhood seem to have interior panels with no outside disconnect. I guess we are a bit unusual in that we do have one, but it seems perfectly normal to me.

Maybe we're too close to the MD to be either northern or southern? :)
 
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reader2580

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Why weren't southern states doing something like this all along? Meter + disconnect outside, panel inside? Why subject the breakers and romex to the temperature fluctuations and increased risk of moisture unnecessarily?

My guess is breaker panels are outdoors in the south because most houses don't have basements. A breaker panel indoors takes up valuable wall space that needs 36" clear in front of it. Same reason a lot of furnaces and water heaters are in the attic to not have to build a utility room.

Personally, if I built a house in the south it would have a utility room for the furnace, water heater, and electrical panel. I would also include a storage room. Yes, it would mean a larger house, but worth it to me. I seriously looked at building on a lot that too wet for a basement and would be a slab. I was planning a storage room in the house since I wouldn't have the storage space in the basement.
 

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Since we are on the subject. Do I understand correctly that this requirement applies to dwelling units only? And, I will not be required to have an external emergency disconnect in my detached shop with independent 200 Amp service and meter?
 

theoldwizard1

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"Code lawyers" are clearly hired by the electrical equipment companies !

What next ? Outlaw 14 AWG wire and 15A breakers ? Why not ban NM-B/"romex" in favor of metal shield flex conduit !

How have I lived so long when I have never inhabited a house with EITHER GFCI or AFCI or tramper resistant outlets !

And yes, I have a FUSE BOX and my kitchen has a 3 wire 240V outlet !
 

wyliesdiesels

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Ok so i read through 230.85, and what theyre talking about is an actual disconnect switch built into the meter pan. We dont use those out here, so when you said meter disconnect i was thinking of a disconnect on the load side of the meter. I was confused.

An actual meter disconnect has no OCPD so its not service equipment.

Yeah, I would guess there's not a lot of this equipment around, since prior to 2020 NEC, residences in northern states didn't have outside disconnects, and southern states I guess use meter-main combos. And I can't see northern states going the route of putting their panel outside, so a meter-main isn't going to be widely adopted.

So a meter with disconnect-only is a solution for a problem that didn't exist until 2020 NEC.

Why weren't southern states doing something like this all along? Meter + disconnect outside, panel inside? Why subject the breakers and romex to the temperature fluctuations and increased risk of moisture unnecessarily?

Actually, a problem does exist and that is the ability for fire departments to shut power off outside of the building on one and two-family dwellings. Hence the reason for the new code

The temperature fluctuations and risk of moisture you speak of are not an issue for meter mains here in california where all the branch breakers are on the outside of the house....

Since we are on the subject. Do I understand correctly that this requirement applies to dwelling units only? And, I will not be required to have an external emergency disconnect in my detached shop with independent 200 Amp service and meter?

yeah if you read 230.85, it says one and two-family dwelling units...

"Code lawyers" are clearly hired by the electrical equipment companies !

What next ? Outlaw 14 AWG wire and 15A breakers ? Why not ban NM-B/"romex" in favor of metal shield flex conduit !

How have I lived so long when I have never inhabited a house with EITHER GFCI or AFCI or tramper resistant outlets!

And yes, I have a FUSE BOX and my kitchen has a 3 wire 240V outlet !

That statement is so laughable. I know several people who are on the CMPs. they are DEFINITELY NOT hired by the electrical equipment companies. Why even post such non-sense when you have no clue?
 

American Locomotive

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Actually, a problem does exist and that is the ability for fire departments to shut power off outside of the building on one and two-family dwellings. Hence the reason for the new code
Definitely makes sense. But I really do worry that with it being code now, that there will be a risk of pranksters yanking handles in the middle of the night. Especially in more "woodsy" areas like mine, where it'd be pretty trivial to sneak up to a disconnect at night. Once the middle and high-school kids find out about the change and head to a new development on a Friday night.

I suspect eventually the disconnects will be allowed to have some sort of tamper lockout that can be quickly and easily removed with the right tool, but stop shenanigans. IF shenanigans becomes a problem, that is. We'll see in 10-15 years if it does.
That statement is so laughable. I know several people who are on the CMPs. they are DEFINITELY NOT hired by the electrical equipment companies. Why even post such non-sense when you have no clue?
Let's be honest here. The NFPA derives most of their revenue from the publication of their standards books, and they also have a substantial number of employees (~370) and a CEO who receives over $1 million in compensation every year. If they thought the code was "good enough", then people would stop buying their publications, revenue would drop too low, and the whole NFPA would basically need to dissolve.

I'm sure most of the people working on the NEC do truly care about creating safe electrical systems, but there are going to be "pressures" - even on the volunteers. You cannot deny the organization has an inherent incentive/bias to constantly be changing things in the code whether it really needs to be changed or not. No code changes = no publication = no money = bankruptcy.

This is sort of an inherent issue with any "private" standards body.
 

wyliesdiesels

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Definitely makes sense. But I really do worry that with it being code now, that there will be a risk of pranksters yanking handles in the middle of the night. Especially in more "woodsy" areas like mine, where it'd be pretty trivial to sneak up to a disconnect at night. Once the middle and high-school kids find out about the change and head to a new development on a Friday night.

people always bring up this hypothetical but come'on now. Have you seen how many service panels are in california with a main disconnect right outside that anyone could just walk up and shutoff? Yet no one ever does. With the huge amount of main service panels here, you'd think it would happen quite a bit but it doesnt.

I suspect eventually the disconnects will be allowed to have some sort of tamper lockout that can be quickly and easily removed with the right tool, but stop shenanigans. IF shenanigans becomes a problem, that is. We'll see in 10-15 years if it does.

Let's be honest here. The NFPA derives most of their revenue from the publication of their standards books, and they also have a substantial number of employees (~370) and a CEO who receives over $1 million in compensation every year. If they thought the code was "good enough", then people would stop buying their publications, revenue would drop too low, and the whole NFPA would basically need to dissolve.

I'm sure most of the people working on the NEC do truly care about creating safe electrical systems, but there are going to be "pressures" - even on the volunteers. You cannot deny the organization has an inherent incentive/bias to constantly be changing things in the code whether it really needs to be changed or not. No code changes = no publication = no money = bankruptcy.

This is sort of an inherent issue with any "private" standards body.

not quite. you know why air conditioning condensers were mandated in the current code to have GFCI protection? Because some f'ing ***** forgot to hookup the EGC to a condenser and an unsuspecting HVAC tech went to service the unit, touched the chassis and got electrocuted to death.

Now obviously the code wasnt good enough to protect him and his life. You think they changed the code just because its their inherent nature to do so or because they needed to to generate revenue and keep their doors open? I think not...

the problem with people's perception, such as yours, is you have no clue what the incidents were behind the reasons for the code changes... I suggest you dig a little to find out the actual incidents and deaths that necessitated a change of the codes...
 

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the problem with people's perception, such as yours, is you have no clue what the incidents were behind the reasons for the code changes... I suggest you dig a little to find out the actual incidents and deaths that necessitated a change of the codes...

Its the USA, always follow the money.
 
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stickshift

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Ok so i read through 230.85, and what theyre talking about is an actual disconnect switch built into the meter pan. We dont use those out here, so when you said meter disconnect i was thinking of a disconnect on the load side of the meter. I was confused.

An actual meter disconnect has no OCPD so its not service equipment.
Right, that's why they want the label "Not Service Equipment". Given this, what's your take on generator interlocks?

What does this mean for generator interlocks? Since no OCPD at meter disconnect, can the interlock breaker be located in the first subpanel (former main panel) fed from the meter?
The panel immediately after the meter disconnect would be the first place that could physically accept the generator breaker.

And it remains a place where you could lock out the grid at the time engage the generator breaker.
 

dscheidt

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I suspect eventually the disconnects will be allowed to have some sort of tamper lockout that can be quickly and easily removed with the right tool, but stop shenanigans. IF shenanigans becomes a problem, that is. We'll see in 10-15 years if it does.

You can put a padlock on them. That will stop shenanigans, and the fire department will take the lock or hasp off with an axe.
 

American Locomotive

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people always bring up this hypothetical but come'on now. Have you seen how many service panels are in california with a main disconnect right outside that anyone could just walk up and shutoff? Yet no one ever does. With the huge amount of main service panels here, you'd think it would happen quite a bit but it doesnt.
Modesto is also a large, populated city with a lot to do. Kids get bored out in the sticks. We had an incident a few years ago where kids were going around stealing Halloween pumpkins from people's yards. I'm not talking about a few pumpkins - literally hundreds. There was a competition between like 30 of the local highschool students to see which "team" could get the most pumpkins. That's how bored these kids will get.

Your anecdotal evidence doesn't hold up. A quick little Google search shows that kids turning outside disconnects/mains off is actually super common in areas that utilize such things. Plus, I've also found tons of posts and messages from people in the Arizona and Utah area who claim to have turned the power off on people's houses all the time when they were kids:

- https://www.heraldextra.com/news/lo...cle_9280c9b1-f4e6-51ee-9b87-bb0a7db24c1d.html
- https://forums.anandtech.com/thread...-and-turned-the-power-to-my-house-off.319829/
- https://www.ksl.com/article/46698973/kaysville-police-aim-to-shut-down-powerboxing-prank
- https://www.abc15.com/news/region-p...-caught-shutting-off-power-to-ahwatukee-homes

It's absurdly naive to think that once external disconnects are mandated by nearly every AHJ that it won't become a problem. Like I said, hopefully they'll allow the boxes or disconnects to be locked.
not quite. you know why air conditioning condensers were mandated in the current code to have GFCI protection? Because some f'ing ***** forgot to hookup the EGC to a condenser and an unsuspecting HVAC tech went to service the unit, touched the chassis and got electrocuted to death.

I suggest you dig a little to find out the actual incidents and deaths that necessitated a change of the codes...
I actually looked it up. Your story isn't correct. What actually happened is a kid hopped a chain link fence, fell off the fence onto a condensing unit, and simultaneously bridged the condensing unit and the fence. Pretty extreme set up and set of circumstances there. Also very tragic.

But we're not arguing about the efficacy of GFCIs.
Now obviously the code wasnt good enough to protect him and his life. You think they changed the code just because its their inherent nature to do so or because they needed to to generate revenue and keep their doors open? I think not...

the problem with people's perception, such as yours, is you have no clue what the incidents were behind the reasons for the code changes...
I do have a clue. You only have to look at the "design rules" the NEC has gradually been phasing in. Specifying outlet spacing, number of circuits for small appliances, mandating outlets near garage doors. Things they really stretched to justify as "safety" items.

Like I said, there are undoubtedly many, many people at the NFPA and NEC who do care very much about safety. They have done a lot of great things for the industry. I don't think the NEC has been "bought out" by manufacturers. However, they have an inherent bias and pressure for creating "solutions in need of problems" due to their funding method (selling code books, running training sessions). If they don't sell books, they will go bankrupt. It's that simple. You absolutely cannot ignore that inherent conflict of interest.
 
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reader2580

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Your anecdotal evidence doesn't hold up. A quick little Google search shows that kids turning outside disconnects/mains off is actually super common in areas that utilize such things. Plus, I've also found tons of posts and messages from people in the Arizona and Utah area who claim to have turned the power off on people's houses all the time when they were kids:

You do realize the code specifically allows locking the emergency disconnect, right? Firefighters carry tools that can cut a padlock.

Are kids going to carry around bolt cutters or cordless grinders just to shut off power as a prank? Doubt it. They will move on to the next house without a lock.
 

reader2580

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So, one person is killed because an air conditioning condenser wasn't properly grounded and now everyone has to buy an expensive double pole GFCI breaker for their air conditioner. The condenser wasn't up to code to start with.

In my case, it is $80 additional for the 20 amp double pole GFCI breaker. Is this required when a condenser is replaced, or is it just when a new circuit is run?

The emergency disconnect is bad enough. Adding that to my house cost me about $700 doing it myself. I bet it would have been over $2,000 for an electrician to do it. The $700 included $200 for a new main breaker panel and a few new breakers. It made sense to just replace the panel rather than trying to separate neutrals and grounds in old panel. I was able to reuse all breakers except one or two new AFCI breakers I bought. I already had AFCI for most circuits.
 

American Locomotive

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You do realize the code specifically allows locking the emergency disconnect, right? Firefighters carry tools that can cut a padlock.

Are kids going to carry around bolt cutters or cordless grinders just to shut off power as a prank? Doubt it. They will move on to the next house without a lock.
If the code allows the emergency disconnect to be locked in the on position, then there should be no issue. As I mentioned in my post.
 
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stickshift

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If the code allows the emergency disconnect to be locked in the on position, then there should be no issue. As I mentioned in my post.
No issue for people like us who will lock the disconnect from the beginning. Others will follow suit as they hear the occasional story of someone on oxygen dying, house being flooded in winter while homeowners are away, etc.

Burglars could cut the lock and disconnect power before entering, but that works to the advantage of a prepared homeowner.
 

acer66

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"Code lawyers" are clearly hired by the electrical equipment companies !

What next ? Outlaw 14 AWG wire and 15A breakers ? Why not ban NM-B/"romex" in favor of metal shield flex conduit !

How have I lived so long when I have never inhabited a house with EITHER GFCI or AFCI or tramper resistant outlets !

And yes, I have a FUSE BOX and my kitchen has a 3 wire 240V outlet !

Yes and I want a new car build to the standards of the 50’s since I never had the use for a seat belt, air bag, crumble zones or a stereo radio!
:lol_hitti:willy_nil:beer:
 

exranger06

Well-known member
Joined
Aug 9, 2015
Messages
1,686
Location
CT
Right, that's why they want the label "Not Service Equipment". Given this, what's your take on generator interlocks?


The panel immediately after the meter disconnect would be the first place that could physically accept the generator breaker.

And it remains a place where you could lock out the grid at the time engage the generator breaker.

It is perfectly fine to have an interlock on the panel after a disconnect. There's no rule that says the interlock has to be on the disconnect itself. The interlock prevents the generator from backfeeding anything that's upstream of the panel where the interlock is installed. If you install an interlock on the first panel, then nothing gets backfed to the disconnect, and thus, nothing gets backfed to the grid.

If you wanted, you could install an interlock on a subpanel that's fed from a main panel, or another subpanel. But the generator would only feed that subpanel, and other subpanels downstream of it. It would not feed the main panel or any panels upstream. There's nothing in the code that says you can't, as far as I know.
 
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