In other forums/threads I’ve seen the 125% applied to the max demand discussed in two notable ways; Some speculated that it was there to account for a .8 PF since max demand is in KW
If the demand data is from the utility, is it often in kW instead of kVA? I thought when utility have demand charges, they are based on kVA rather than kW. But I have no experience with that, so perhaps that is my misconception. Or perhaps when the tariffs doesn't have demand charges, you get demand data in kW.
If the demand data is from user installed monitoring, I would think that would be set up to monitor actual current as one of the variables, so you'd have actual kVA.
and others speculated that it was there because the continuous vs non continuous portion of max demand are unknown and applying 125% was to ensure continuous loads were accounted for just in case.
As regards the quoted portion of 220.87(2) in the OP, I would not agree. The rules in 210, 215, and 230 that are about actual ampacity (as defined in Article 100) do not use a 125% factor for continuous loads. Only the rules that are about termination considerations and misuse the term ampacity to refer to an uncorrected and unadjusted table value use the 125% factor.
There is a third possibility, namely that the demand data being used does not fully reflect the expected maximum current, either because a particular load combination that comes up rarely did not occur during the monitoring period, or because of time averaging (a 15 minute interval would not fully reflect a 5 minute peak current). So the 125% factor would be a correction for this.
I guess I'd say I don't know which of the 3 explanations are correct, but that the 125% factor is sufficient to cover them all in whatever proportions are likely to occur in the typical case.
Lastly, if you knew that half or more of the max demand was made up of continuous loads AND most of the new load was continuous as well - would your stance be the same on not considering the continuous portion of the new load? I’m imagining numbers in the thousands here, for context.
No experience with anything so large, but I would have thought that if you're dealing with currents in the 1000s of amps it would be cost effective to use 100% rated equipment to reduce the required wire sizes. In which case there is no 125% factor for continuous loads.
Cheers, Wayne