You are absolutely correct. Having the neutral and ground bonded at both the transformer (padmount) and at the load center (with the ground rod) creates a parallel neutral-ground path. This is a safety hazard and violates electrical code.Here's a breakdown of why and what should be done

Why it's a safety hazard:
Parallel Neutral-Ground Path

With multiple bonding locations, neutral current (current returning to the transformer) will split and flow through both the neutral conductor and the grounding conductor (including the ground rod and earth).

Elevated Ground Potential

Any voltage drop along the neutral conductor will appear on the grounding conductor at the load center. This means the metal enclosures of appliances and equipment connected to that load center will be energized, creating a shock hazard if someone touches them while also touching a grounded object (like a water pipe).

Increased Risk of Neutral Failure

If the neutral conductor is damaged or disconnected, the entire neutral current could be forced to flow through the grounding path. The grounding conductor is typically much smaller than the neutral and is not designed to carry that much current. This can cause the grounding conductor to overheat, potentially leading to a fire or further damage.

Stray Voltage Problems

Even with a healthy neutral, the parallel path can cause stray voltage on the grounding system, which can be problematic for sensitive electronic equipment and can even affect livestock (if present).

Why it violates electrical code (specifically the NEC in the US)

The National Electrical Code (NEC) requires a single point of grounding for a separately derived system (like a transformer feeding a load center). The purpose is to create a predictable and safe path for fault current to return to the source, causing the overcurrent protection device (circuit breaker or fuse) to trip and clear the fault.

NEC Article 250.24(A)(5) (2023)

This article clearly states that the neutral conductor shall be connected to the grounding electrode conductor at one location only.

What should be done to correct the situation

1.

Remove the Neutral-Ground Bond at the Load Center

This is the most critical step. Disconnect the bonding jumper that connects the neutral bus bar to the ground bus bar in the load center.2.

Maintain the Grounding Electrode Conductor

Keep the grounding electrode conductor (the wire connecting the ground bus bar to the ground rod). This connection provides a path to ground for fault current.3.

Ensure Proper Grounding Conductor Sizing

Verify that the grounding electrode conductor and the equipment grounding conductors (wires connected to the ground bus bar and running to the outlets and appliances) are properly sized according to the NEC.4.

Inspect the Neutral Conductor

Carefully inspect the neutral conductor for damage or loose connections. Ensure it is properly sized for the expected load.

In summary

Your assessment is correct. The neutral and ground must be bonded at one* location only in this system – at the padmount transformer. Removing the bond at the load center is essential for safety and code compliance. Consult a qualified electrician to perform the necessary work and ensure that the entire system is properly grounded and bonded according to the NEC and local codes. This is not a DIY project due to the inherent dangers of working with electrical systems.

Important Note: Electrical codes can vary by location. Always refer to the current edition of the NEC and any local amendments or regulations that apply to your specific area. Flag for review