General - If you look closely at NEC Article 311 (in the 2020 edition of the Code), you'll see that there are ampacity tables referenced to "100% load factor". This might seem like an interesting item, but if you go to look up "load factor" in NEC Article 100, you'll find that there is no definition.
So what is load factor?
The short answer is: The ratio of the average load to the maximum load over some time period. Usually, by load, we mean current. Basically, take the average current you see over some time period and divide it by the maximum current you see in that time period to get your load factor.
The long answer is: It's complicated.
Load factor plays into the Neher-McGrath equations as permitted by NEC Articles 310 and 311 for calculation of ampacities. In aboveground installations, load factor is rarely considered since conductors will heat up fairly quickly. Underground, conductors can take much longer to heat up, and load factor can play a big role in sizing conductors to get more out of them. Imagine this: a hypothetical load uses 100A of current for 1 minute every day. Per the base NEC calculations, you would say that you have to size this as a noncontinuous load and your underground conductors would be required to carry 100A. However, if you were to do more detailed engineering calculations with this insanely low load factor, you would realize that the underground portion of your circuit could carry MUCH more than 100A before overheating under steady-state conditions. There's a thermal inertia to the system, that takes time to heat up. Nothing in the universe at the human scale happens instantaneously, and underground heating of cables just happens to be part of that universe.
Computing the Load Factor - How do we actually compute a load factor? I referenced "some time period", but of course that's not very useful. Base on my hypothetical example above for a one-minute load, the load factor changes considerably if I base it on a single day, an hour, or a minute. My 24-hour load factor would be about .07%, my hour load factor would be 1.7%, and my one minute load factor would be 100%.
What actually makes sense to use as the load factor can be interpreted in several ways:
In the physical sense, the load factor should be based on the thermal capacitance of the soil (how long the soil takes to heat up), so that we can have a sense of the time scale of interest. If we were to measure this property for each project, we could make a very educated guess at what a "steady-state" condition is and get the most accurate assessment of ampacity.
In the Neher-McGrath calculations, a 24-hour load factor is used based on their research methods. Since the NEC allows engineers to utilize the Neher-McGrath equations, it stands to reason that the 24-hours load factor would be the largest load factor that could be considered code-compliant.
With a more conservative NEC interpretation, it might make the most sense to base the load factor on 3-hour intervals. The NEC defines a continuous load as one that may run for three hours or more at its operating value. This time scale delineates when the NEC requires an additional 125% factor for overcurrent protection and ampacity calculations.
When in doubt, use a conservative design. Load factors are a valid way to increase the calculated ampacity of a conductor (especially when there are a lot of them nearby one another), but a detailed assessment of what the worst-case load operating scenario should be carefully considered before assuming a design works. If conductors are protected based on an incorrectly calculated ampacity, safety becomes an issue. Trip ratings of overcurrent devices may no longer protect the conductor from overheating. This will lead to shortened conductor lifespans in the best case, and catastrophic failures in the worst case.
A Related Issue - There's more to the problems of load factor than just the time scale for computation. Think about the NEC definition of continuous vs. noncontinuous loads. If we expect something to run for three hours continuously, the NEC requires us to provide an additional margin for sizing to make sure the system can handle that additional heat. Likewise, consider the following two load profiles referenced to 24 hour time intervals:
Common sense tells us that we should expect a higher operating temperature for the circuit where all of the heating happens back to back. The more distributed the heating becomes across the day, the lower the operating temperature should be. However, if we use a 24-hour window to calculate the load factors for these two profiles, we'll get the same 50% result. Neher and McGrath based their original analysis around a particular load profile shape, so their view of the load factor was arguably quite limited. Issues like this weren't really addressed as part of the paper.
Today, engineers can use transient analysis with evaluation of the soil's transient heat dissipation capabilities to determine the maximum operating temperature. Transient analysis will yield more accurate results but requires a greater level of effort than steady-state evaluations.