In 3-phase AC application, there is additional heat dissipation due to skin effects and proximity effects in bus bars. In addition, when the 3- phase AC is used to drive a motor at high fundamental frequency, for example between 666 Hz and 1450 Hz, there are higher bus bar losses due to presence of higher frequency harmonic content. High frequency current carrying bus bars in aircraft power panels are typically cooled by natural convection and radiation. In this paper a thermal and electrical finite element analysis (FEA) is done for a bus bar system. For electrical loss modeling, 3D electromagnetic FEA is used to characterize losses in three parallel bus bars carrying AC at various frequencies. This loss analysis provides correlation of heat loss as function of frequency. A method is presented where this AC loss is incorporated using computational fluid dynamics (CFD) based thermal model. Material resistivity is artificially adjusted to account for skin and proximity effects. Thermal analysis results are then compared to determine net effect of the AC skin, proximity and higher frequency harmonics on bus bar temperatures. Thermal analysis is done using CFD tool such as ICEPAK. Modeling of bus bar uses Joule heating method where the heat dissipation in bus bar is computed by analysis based on current, specified resistivity, temperature coefficient of bus bar material, geometry of bus bar and temperature.