Final answer:
The xo terminal of the transformer must be in the neutral position.
Step-by-step explanation:
When stepping down voltages from 480 to 120/208 Y, the xo terminal of the transformer must be in the neutral position.
A Y transformer configuration consists of three windings connected together in a triangular formation. The xo terminal is the common neutral point where all three windings connect. In a Y to Y transformer, the xo terminal is connected to ground, while in a Delta to Y transformer, the xo terminal is not used and left unconnected.
Therefore, in the given scenario, the xo terminal of the transformer should be in the neutral position for stepping down voltages from 480 to 120/208 Y.