There's a nice article on this by someone who sounds pretty well up there in the electrical field.
http://ecmweb.com/mag/electric_middle_wire_isnt/
I'll try to explain it myself also.
The reason we use different size conductors, protection and the most of the NEC hoopla it's one and one only: HEAT caused by the ampacity that runs thru that wire.
A #12 wire rated at 30A, 90C mean that when there's 30A running thru that wire it'll get 90C hot. Now, when you land this wire on a terminal rated for only 75C or 60C and the wire gets 90C hot, you got a problem, the terminal will cook. This takes care of the first part.
However, as the article I mentioned above is titled, the middle of the wire it's not its end. When the wire is in conduit or or a box or a gutter, there's other heat limitations that apply. When you have 6 conductors getting 90C hot, the heat will accumulate so NEC limits the heat each wire will create by limiting the amps each wire will carry,see the derating table for 3 or more conductors. Same reasoning applies to the temperature corrections. This is the second part.
Let's say I want to size the wire for a 40A circuit landing on a breaker with a 60C lug rating and 6 conductors in the raceway.
1:
"The temperature rating associated with the ampacity of a conductor shall be selected and coordinated so as not to exceed the lowest temperature rating of any connected termination, conductor, or device."
That means that in sizing my wire I have to look up at the 60C ampacity column which is #8.
2: However if I use a 60C rated wire and derate for the 6 conductors, I'll get only 32A allowed. So if I am to use 60C rated wire I will have to use a #6 wire.This is where the second part of the article comes in play:
Conductors with temperature ratings higher than specified for terminations shall be permitted to be used for ampacity adjustment, correction or both.
So if I look at 90C rated #8 wire I see it's 55A. This part of NEC allows me to use the 90C rated #8 and derate from the 55A value when making corrections for the number of conductors.
This has been a never ending discussion and sadly, even after the code made it clearer, a majority of people still claim that if you have 6-#12 in a conduit you have to derate from the 20A value and not the 30.
NEC 2008 Article 110.14 (C):
The temperature rating associated with the ampacity of a conductor shall be selected and coordinated so as not to exceed the lowest temperature rating of any connected termination, conductor, or device. Conductors with temperatur ratings higher than specified for terminations shall be permitted to be used for ampacity adjustment, correction or both.
I read it many times but I did nor quite understand what it want to mean?
I will appreciate if anybody can explain thie article with examples.
Thanks,
Mamun