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F.A.Q.#17.

What is the neutral wire?...
   The utility transformer feeding your service is 240 volts single phase. In order for you to have 120 volts they need to split the voltage with a center tap at the transformer called the neutral. This is the third wire brought to the neutral buss in your main panel. This wire is also referred to as the grounded conductor. The grounding conductor is the wire attached to the water main or electrode and than to your panel and is used to ground your electrical devices. The neutral or white wire in your circuit is the return for the live feed from your circuit and is bonded at the main panel to the grounding conductor so that any stray currents caused by equipment faults will go back to the utility transformer.
Grounding
 The grounding of electrical devices is possibly the best safety precaution you can take. Grounding helps to prevent accidents to persons and damage by fire to property.
 An equipment or conductor-enclosure ground refers to connecting the non-current-carrying metal parts of the wiring system or equipment to ground. This is done so that the metal parts with which a person might come to contact is at or near ground potential. With this condition there is less danger that a person touching the equipment or conductor enclosure will receive a shock. Also metal conduit, raceways, and boxes may be in contact with metal parts of the building at several points. If an accidental contact occurs between an ungrounded conductor and its metal enclosure, a current may flow to ground through a stray path made up of sections of metal partitions, piping, or other similiar conductors.
 If the equipment is grounded, the resistance of the path through the grounding conductor will usually be much less than the resistance through the stray path, and not much current will flow through the stray path. Sufficient current will usually flow through the grounded path to blow the circuit fuse or trip the circuit breaker and thus open the circuit. On the other hand, if the equipment is not grounded, sufficient current will flow through the stray path to be a shock hazard.

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