Knob and Tube in attic / insulation

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The old college try

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Oh. The black lines are existing black wires, and the red are existing white wires. The x's represent wires that disappear into the ceiling, and the c's are wires that I found cut and exposed just laying under the insulation. I checked the switches in the rooms and they all seem to have new wire running to them with the old wires capped off in the boxes. I'm tempted to just go and cut out all of the this wiring and then figure out how to hook up whatever doesn't work (if anything). For the most part, everything seems to have new wiring run, but for whatever reason this old wiring is tied into the new. If I have to run a new cable all the way from the panel, then so be it. If I do this, can I just put the wires that are sticking up into boxes and cap them? I think that the only item I'll have to re-wire is the ceiling fan. Also, should I figure out a way protect the small bit of wire that sticking out of the ceiling into the box before I insulate?
 
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The old college try

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Better tester

I went and picked up a better tester and was able to determine the circuit that the wiring is on. The tester sings until that breaker is shut off, however it does keep slightly beeping until another specific breaker is shut down. I haven't had a chance to check the voltage in the line during the slight beeping, but is it possible that the wiring is not still connected, but rather just picking up the field from other wires that are close on another circuit? If so, would I even be able to measure that voltage in the line?
 

Mikey

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is it possible that the wiring is not still connected, but rather just picking up the field from other wires that are close on another circuit? If so, would I even be able to measure that voltage in the line?
Yes -- the wires running close to each other form a transformer, and a small voltage is induced in the "dead" wire. You could measure that voltage with a very sensitive voltmeter, but probably not with a typical inexpensive tester.
 

The old college try

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Well, I got an estimate from an electrician of $1200 to fix my attic wiring problem, so, I started ripping apart a wall and found the connection point of the old knob and tube to the new wiring that leads to the panel. This line has at least 2 places where it has been spliced, both places just sloppy wire connectors with no junction box, and the old k&n runs through an exterior wall filled with blown in cellulose. Turns out the only thing that this wire powers is the ceiling fan in the upstairs hallway. I think I'm just going to disconnect and abandon this wire and connect the fan to the lighting circuit. The lighting circuit has 5 lights and 4 receptacles (three of which are located at the light switches and rarely used) all of which are on the second floor. I'm also thinking of moving the 4th receptacle over the circuit with the rest of the receptacles on the second floor. I can't see any reason why someone would go through all the trouble of running the cable up through the first floor wall to connect to the old wiring just to power a single ceiling fan. Any thoughts on what I'm proposing?
 
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