I have 2 dedicated circuits:
- 40 amp water heater
- 30 amp electric range
Both have 2 hots and a neutral grounded at the panel. One runs through a junction box where the wires are connected and continue to the water heater, the result of a previous revision. All wires are individually insulated and encased in EMT mounted to the overhead joists in the basement.
In order to add a ceiling, I replaced the "junction box to water heater" and "panel to range" runs with FMT in the joists with 8/2 and 10/2 NM-B. The white and black wires are used for the hot and the uninsulated ground for the neutral. I used extra insulation from the stripped wires to cover the exposed tail portion of the ground so there would be no contact with a box or other hot, but it's otherwise still a bare ground inside the sheathing.
The dryer plug is an old 50-amp style (no ground), and the water heater connect directly to the 2 hots and neutral, no ground either.
What, if anything, is wrong with using the bare ground as the neutral? I've seen mentions of insulation being required in the NEC and elsewhere but am unclear on whether it applies or what the real risk is here.