next size up rule 240.4(B)

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Does the next size up rule apply to services? Also what about parallel conductors?

Service conductors have their own sizing method, which usually will allow wire smaller than the OCPD.

The next size up rule does indeed apply to parallel sets. As long as the OCPD is either 800A or less.

The places where the next size up rule does NOT apply are as follows. Including, but not limited to:
1. Circuits of any kind with an OCPD larger than 800A.
2. Tap conductors, where 240.21(B) would apply
3. Transformer secondary conductors, of a customer-owned transformer, where 240.21(C) would apply
4. Feeders where the ampacity of the conductors at conditions of use is an exact match to a standard OCPD.
5. If the wires are part of a multi-outlet circuit supplying receptacles
 
Service conductors have their own sizing method, which usually will allow wire smaller than the OCPD.

I dont quite follow/agree. Perhaps you are referring to if a single set of service conductors are feeding multiple service disconnects? Or of course there is the dwelling unit sizes. But other than those two cases I dont see much difference. Of course the overcurrent protection integral or adjacent to the service disconnect is only providing overload protection, but the conductor and OCPD sizing and application of "next size up" all works out the same.
 
Service conductors have their own sizing method, which usually will allow wire smaller than the OCPD.

There are a few ways to size service conductors but without a doubt 240.4(B) is used a lot for services with a single disconnecting means and that are 800 amps or less.

See this exception from article 230.

230.90(A)Exception No. 2: Fuses and circuit breakers with a rating or setting that complies with 240.4(B) or (C) and 240.6 shall be permitted.
 
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