I have an old house with a detached garage. There is power to the detached garage through a 3-conductor cable that is routed above ground. Power from my house comes from the power pole, to my house. To get to the garage power from my main panel the cable routing goes back up to the power pole and down to the garage because the power pole is right by my garage.
My understanding is that 3 conductor power (hot, hot, neutral) to a subpanel is not code anymore but was used quite a bit back in the day. In the case of 3 conductors to a subpanel you do actually bond the neutral and ground at the subpanel and then have a separate ground rod at the garage. As long as their is no ground conductor that can get back to the main panel. Correct?
I was planning on making the necessary fixes to make it that way: install ground rod at garage, bond neutral and ground (grounds are currently not connected to anything!), and ground it to the ground rod.
I opened my panels to go over my plan again but then realized the neutral to my garage is a bare wire! That seems unsafe to me. Is this a big problem or not so much and I can continue with my plan? If it is a big problem do I need to get an electrician to replace that bare neutral, and at that point just replace it with a 4 conductor cable? Or is there some other option?