For those in the groupe that have emaied me to see how this is going I have gotten permission from Bob Hulse an engineer with Cutler Hammer to post his reply he sent me regarding this problem. There are two post, the initial reply plus a second post when I asked permission to post his reply and he added some further info. I might add again the transformers in question are delta/wye.


The situation you described, where the X0 bushing of the 480/208Y120
transformer is both bonded to ground and connected to the 480 volt system
neutral is a common mistake which I have seen in many older commercial
building installations. Generally this situation is discovered after an
upgrade of the 480 volt system requires the installation of ground fault
protection which then exhibits nuisance tripping. Though I do no have time
at this point to research and quote all the code articles that apply, I can
tell you with confidence that correct engineering practice dictates the
system to be configured as described in the following paragraphs:

The 480 volt system neutral should be grounded at, and only at, the service
entrance point; i.e. the bonding jumper in the service entrance switchgear
or transformer. Since the neutral conductor carries current under unbalanced
load conditions, it will be at a potential above ground (caused by the IxZ
drop along the conductor) at any given point beyond the bonding jumper;
which is why it is an insulated conductor. Any additional connections
between the neutral and ground is effectively a ground fault on the system
and will result in the ground conductor/system becoming a parallel path for
neutral current. Under severe single phase loading this can result in high
step and touch potentials to be present at any point in the system where the
integrity of the bonding conductor is compromised; i.e. a loose or corroded
connection or conduit fitting where the conduit serves as the bonding
conductor.

At the 480/208Y120 transformer secondary, the X0 bushing constitutes a
separately derived neutral and should not be connected to the 480 volt
system neutral, but must be bonded to the system ground conductor
(non-current carrying). No other connection between neutral and ground
should be made past this point on the 208 volt system for the same reasons
as mentioned above.

I hope this is a help to you. Please feel free to contact me if you have
additional questions or wish to discuss this further.

Regards,
Bob Hulse
Advisory Engineer
Cutler-Hammer Engineering Service and Systems Division
Winthrop Maine


Dave,
I finally got a chance to visit the site and review the replies, Scott35 had
a very good answer. In the interest of completeness of the discussion, I
would offer the additional comment dealing with the transformer primary
connection.

If the primary is a delta then only the three phase
conductors are required even though the source panel may be 4 wire. If the
transformer primary winding is a wye, the source neutral conductor is also
required to be connected to H0. Omission of the H0 connection on a Y-Y
transformer will adversely effect transformer performance under unbalanced
load, and effectively result in some level of impedance grounding of the
secondary, even with X0 bonded.

You may post my previous reply, and the comment above if you wish, with my
name and affiliation attached. I hope you found this helpful in your
situation, and if I can clear this issue up for others it is a bonus.

Happy New Year,
Bob

Thanks everyone for the input and I also would like to wish all a happy new year

Dave T.