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It is used as a hot wire.

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In a three conductor cable set the third wire colour is red. In home wiring a three wire cable is used in a couple of locations. If the circuit involves a three way switching circuit, the cable between the two light junction boxes is fed with a three wire cable. Check the internet for three way lighting connections. The other location a three wire cable is used is in split circuitry. Your kitchen counter receptacles use this method of wiring. The tie bar in the receptacle is removed on the hot (brass colour) side of the receptacle and the red wire is connected to the top brass screw and the black wire is then connected to the bottom brass screw of the receptacle. The white wire, as always, is connected to the silver coloured screw of the receptacle. Another example of using a three wire cable is to take two circuits from the distribution panel to two separate circuits on the other side of the house instead of running two, two wire circuits. The three wire cable is terminated in a junction box and two two wire circuits are feed from this junction box to the circuits that require power. The two two wire circuits will use the white wire of the three wire cable as a common neutral.

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Q: Why is a red colored wire in a 120 volt circuit and what does it do?
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