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Is that the 2 pin plug that goes into the regulator on the alternator?
Yes, 1 wire goes to the dash light and the other wire goes to the positive terminal on the battery to "sense" the voltage. This wire runs via a fusible link.
Yeah I might pull it out and get a new one. Are alternators supposed to drop in voltage when they get warmer? I’ve noticed that with mine.
I wouldn't think so unless it's cooking hot but that would suggest there is something wrong too.