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Running AC through a coiled up extension reel is potentially dangerous only because any heat buildup can't escape from the inner coils. This is an issue if you are drawing high current. If you're running an electric heater, unwind the reel. If you're using an inspection light, it'll be OK.The mention of magnetic fields and inductance is a complete red herring; with a normal extension reel the fields from the line and neutral conductors cancel and the presence of any inductance doesn't contribute to any heat generation.