Yep, 75C terminals and 40C ambient. Cabling needs to be derated to never exceed 75C, I'm sure you're familiar with this. Exceeding 40C (104F) ambient, though, can lead to nuisance tripping of the breaker.
75c is the terminal rating and 40c is the ambient temperature they are calibrated at ... the way I have heard it.
What temperature (in C) is the conductor insulation rated at? Reason I ask this, is if you can have up to a 75C connection, what is that actual connection doing to the wire connected to it? Any heat that comes from a connection, means resistance, and therefore a BAD connection, think pyrolysis.
The tempertaure rating of the wire depends on the type of insulation, which is marked on the wire. Probably the most common type used here is THHN/THWN.
THHN/THWN has a 90 degree rating in dry applications, and 75 degree in wet.
The wire can attain those temperatures in a number of ways; generally, the ambient temperature (say, in pipe running across a rooftop) provides a significant rise; simple resistance to the amount of current passing through the wire provides the rest.
Since the temperature rating of the connections is usually lower than that of the wire, we are not able to use the wire to it's fullest potential. That is, we are limited to, say, 65 amps in a wire that otherwise might be rated for 75 amps. Since there isn't a 65 amp breaker out there, if we can't use a 60 amp breaker for the application, we would have to use a larger wire.
Other factors ... wire fill, for instance .... are also considered in 'de-rating' the wires.
While the ambient temperature can cause one section of the wire to be hotter than another, the one factor that heats the entire wire, from one end to the other, is the current carried by the wire. In the example given above, running 75 amps through that particular wire, at room temperature, can easily result in the wire inside conduit reaching 90 degrees - and that's without any connections or splices entering into the equation.
I just think of it as a chain with the weakest link determining the ampacity. That can be the real rating or a code mandated rating like you have in most cable wiring methods that put you in the 60c column or 240.4(D) that force the ~80% derating on you in small conductors, no matter what else you have.
I am still waiting to see what happens when you have a panel stuffed with AFCIs and installed in an un-airconditioned garage.
I think we already know that answer... CLICK
CLICK CLICK ... CLICK
...and that's it. The rest would cool down, see? Thermal derating applies to the temperatures in the panel, not just in the garage. If that environment is going to exceed the rating of the panel, the panel shouldn't be there.
Steve - an excellent interprutation of an AFCI in action!
Even without the AFCIs in the panel, 104F is a very easy ambient temperature to reach and excede in many environments. Let alone deserts, you could easily have a panel in direct or partial sunlight in a temperate area reach well above 125F. It's a metal box!
Now add some heat from heavy currents, such as AC, etc. 40C seems like an awful low testing temperature to rate electrical equipment, IMHO.