Every electrician who skips derating because “it’ll never get that hot” or “the breaker will trip first” is gambling with insulation life. The chart’s story is simple:
At 55°C ambient, the factor is .
At 20°C, that 12 AWG wire’s insulation can shed heat easily. But at 55°C, the wire starts hotter. It heats up more under load. Now the copper and insulation approach — the insulation’s long-term limit. wire derating chart
That’s the new maximum before insulation damage. But the breaker is 20A, so the circuit is limited to 20A anyway. the factor is . At 20°C
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