From the 2002 NEC handbook
No maximum distance is specified from the point of entrance of service
conductors to a readily accessible location for the installation of a service
disconnecting means. The authority enforcing this Code has the responsibility
for, and is charged with, making the decision as to how far inside the building
the service-entrance conductors are allowed to travel to the main disconnecting
means. The length of service-entrance conductors should be kept to a minimum
inside buildings, because power utilities provide limited overcurrent
protection and, in the event of a fault, the service conductors could ignite
nearby combustible materials.
Some local jurisdictions have ordinances that allow service-entrance conductors
to run within the building up to a specified length to terminate at the
disconnecting means. The authority having jurisdiction may permit service
conductors to bypass fuel storage tanks or gas meters and the like, permitting
the service disconnecting means to be located in a readily accessible location.
However, if the authority judges the distance as being excessive, the
disconnecting means may be required to be located on the outside of the
building or near the building at a readily accessible location that is not
necessarily nearest the point of entrance of the conductors. See also 230.6 and
Exhibit 230.15 for conductors considered to be outside a building.