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The only wire with an alligator clip is the "ground wire. It should be connected to the part being painted. The air ( and powdered paint) is charged positively with about six thousand volts if you use the HF gun. The charge wants to go to "ground" so the paint (finely-ground pigmented plastic) sticks to the part!DoctArrgh Jon
The stenci.l should be made from high-temp green tape. Make sure you have a tab of sorts to remove it (after) baking. Leave it on during the bake cycle. If you remove it right after applying the powder, static will lift the paint off the part.DoctArrgh Jon
Regarding powder-coating as insulation, it is plastic, takes a charge yet it's non-conductive. Metallics are the exception.An average powder coating layer is .003" thick; once baked. As such several coats "should" provide insulation for 120 volts. I base this solely on 1000 volts ability to "arc" .250" (1/4 inch) to ground at atmospheric pressure. When in doubt/test it out.
Make a sewing pattern from a packing tape mould