I would suggest you read the actual rule in the NEC code book for completeness.
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I found this: Sizing a Circuit Breaker
"NEC sizing rules. Secs. 210-22(c), 220-3(a), 220-10(b), and 384-16(c) all relate to the sizing rules for overcurrent protective devices (OCPDs). The first three all specify the same requirement:
Sec. 384-16(c) has the same requirement, except that it's stated in terms of the loading of the OCPD. This rule states that an OCPD can be loaded to only 80% of its rating for continuous loads. Remember that 80% is the inverse of 125% (0.80 = 1 ÷ 1.25) and, as such, the rules are indeed identical in their end requirement.OCPD size = 100% of noncontinuous load + 125% of continuous load.
Read the rule closely; the 125% sizing of the OCPD (or 80% loading) is only applicable when continuous loads are involved. CBs and other OCPDs can be sized at 100% of their rating for noncontinuous load applications."
So you are generally correct, but that does not take the power factor into account (which Gene claimed to be 0.75 for a typical AVR). Try this calculator with sample 1,000 W loads of various non-continuous types, and a 120 V circuit single-phase AC, and see how that affects CB size. With the PF=0.75, the CB is 1.33x that with PF=1, all other things being equal. What do you think the safety factor (SF) should be for AVRs? Higher than the 75% for AC or even 100% for a welders (an even more non-continuous load)?
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