Our new dryer has 3 prongs vs. 4. We are changing to the new 3 prong dryer outlet, but want to make sure we are grounding. The wires coming from the wall our white, red & black - the the copper wire.
Do I need to ground it??
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You have a proper NEMA 14-30 dryer receptacle with a ground wire, which is good. However, your "new" (old) dryer has a 3 prong (NEMA 10-30) cord. This can be rectified -- get a 4 prong (NEMA 14-30) dryer cord and install it on the dryer in place of the existing cord, making sure to remove the neutral-ground bonding jumper in the dryer.
I have no idea why you think 3-prong sockets are new. They are obsolete and dangerous. They are "exactly what they look like": the 3-prong outlet omits the ground, and the 4-prong outlet adds the ground.
Any problem with the neutral wire will result in the dryer frame being energized at 120V. Touching that and anything grounded, like the washing machine right next to it, will shock you.
It is illegal to convert a 4-prong to 3-prong. The home improvement store will happily sell you one, but they are only legal to sell for like-kind replacement which is not what you are doing.
The appliance manufacturers got a loophole put in Code so they could continue to sell appliances to old houses wired with the 3-prong outlets. In this case they bootleg ground, which is as bad as it sounds. Why on God's green earth the appliance store let one go out with a 3-prong plug is beyond me.
When reconfiguring the dryer for a 4-prong cord, make sure to remove the neutral-ground bootleg jumper. Neutral should be separate from ground.
The official name for the 4-prong is NEMA 14-30. The official name for the hazardous 3-prong is NEMA 10-30. Not to be confused with the safe but useless-for-your-dryer NEMA 6-30, which does have ground but not neutral.
Arriving late to the party...
I wonder if this was Bosch or Miele dryer. While both use 3-prong outlets, neither Bosch or Miele can be connected to old ungrounded 240V 3-prong NEMA 10-30 outlet.
Bosch uses 3-prong 240V NEMA 6-15 outlet (both for washer and dryer), while Miele uses common 120V NEMA 5-15 outlet (also for both washer and dryer, but requires dryer to be on a dedicated 15 amp circuit). Both of those are 3-prong outlets, both do have ground, and both are perfectly safe. Unlike the old unsafe NEMA 10-30 which doesn't have ground.
So, if it was one of those two dryers, you all scared Molly for no good reason ;-)
If it was Bosch or Miele, while it is possible to replace 4-prong NEMA 14-30 for either 6-15 or 5-15, it doesn't make sense to do that. It'll have to be done by electrician and it's going to be a bit pricey to do. It'll also mean if she was to get a new dryer 10 years from now, she might need to get electrician again ($$$) to rewire laundry room back to 4-prong NEMA 14-30 outlet, because that is what almost all other dryers require.
Instead, both Bosch and Miele sell inexpensive adapters that plug into NEMA 14-30 outlet and have two NEMA 6-15 (Bosch) or two NEMA 5-15 (Miele) outlets, each of the two outlets with 15 amp fuses inside the adapter itself. You simply plug both washer and dryer into the adapter. And that's it. Done.
Because people don't tend to have 6-15 outlets in their house, or 5-15 on a dedicated circuit (i.e. not shared with any other outlet in the house), it's a bit odd choice on Bosch and Miele part to sell dryers in the US with those plugs. But it is what it is. Just get the adapter. On the positive side, at least it is impossible to plug those dryers into old ungrounded 3-prong NEMA 10-30 outlets. Unlike almost all the other dryers that can be wired to connect to that old unsafe outlet.
I'm surprised nobody at the store said anything or asked what type of outlet is in the laundry room, and sold the adapter with the dryer. Literally every time I looked at Bosch and Miele dryers (which was like two times), that sales person asked me what type of outlet I have.
I was just reading this and was going to comment about the "good old days" syndrome, when something hit me. Usually a dryer receptacle only has three prongs. I almost got caught up in the same argument, but a dryer has no need for a neutral it runs off of 240V not 240/120V and a standard receptacle provides slots for both sides of the 240V circuit and one slot for the grounding wire, and you usually run a 10/2 w/ ground romex to the receptacle.
I don't know why someone had a neutral for a dryer unless it was some sort of a special order. So he ordered a new dryer with the right configuration for a standard dryer. I would install a matching receptacle and wire nut off the neutral in the box.