Your FPE looks like a bit of a troll to me. FPE seems restricted to coaxial cable. Perhaps you meant FEP.
In any case, this chart shows 12 gauge ampacity at 40 amps, not 45. [THHW] 90' Also, if one looks at the ampacity of #4 copper, it becomes quite understandable why 100 amp services can be wired with it here. Free air or not.
If your water heater is at 194' F, you have larger issues than wiring.
SOUR, not sweet. But its true most areas, perhaps not Idaho and Humboldt county which has an owner builder set of rights, I forget the term, but with proper liability releases, you can build your pyramid of bottle caps. And wire it with FPE insulation.The sweet thing about inspectors here is if they see something being built or work being done they can obtain an administrative search warrant to enter the property for the inspection process whether or not a permit was obtained by the builder or not. Of course there are limitations to this rule but it does not stop inspectors in this tight economy today.
If no permit was obtained by the builder the inspector can have the meter pulled on that property until they are in compliance
Proviso: Inspectors, unless they have your particular sense of order, are loathe to initiate such a process that may cost thousands with small hope of return. The legal system is plugged with a bit more egregrious crime, and the DA looks long and SLOOOW at these cases. Its more likely that a hold be placed for rehab at time of change of ownership, or a tax lien applied.
When the owner say she is on oxygen with a bad heart, no DA on earth can pull her meter. And he wont get her medical records either. They cant even pull the meter if she stops paying. I think Thomas Jefferson has something to do with that, and he was certainly not an electrician. The PUC has a bible that trumps the NEC.
So rather than continue the jousting, what wire insulation does your east coast heater have?