Cessna 402 Captain reported noticing smoke and fumes with the anti collision light switch tripping in cruise. Glowing wires were discovered in the Captain's side wall. The flight crew requested priority handling and diverted to make a precautionary landing.

Narrative

Just south of ZZZ; I looked over and noticed the switch for the Anti-Collision lights had tripped. I felt the panel and it was warm. Myself and First Officer (FO) started smelling smoke and it appeared to be emanating from the Captain arm rest. Sensing that there could be a fire; I gently pulled back the upholstery on the side panel next to my left leg and discovered a wire glowing orange and smoke came out. I ran the red box memory items; consulted the QRH and we simultaneously made the turn back to ZZZ1. Upon pulling the upholstery back; I did not see any visible flames; only heat causing smoke. Given our; position relative to ZZZ1; it was a very quick turn around and we were on the ground in minutes. Upon arrival; the smoke had dissipated and the wire seemed to have cooled down so I opted not to do an evacuation on the taxiway and instead entered the ramp area where firetrucks were waiting for us. I also had determined that since there was no visible fire; the smoke had dissipated and the location of the runway exit to the northeast ramp; I could safely park and not shut an area of operation down. We safely shutdown and disembarked. The medical crew asked us and our passengers if we were ok and required any medical attention. No one required medical attention and passengers were in good spirits. A member of the ZZZ1 FBO asked for details to file an incident report which I gave to him. Once on the ground; I spoke with Operations Control; Maintenance Control and the Supervisor. When we initially notified ATC of smoke in the cockpit we did not request priority handling because I had seen the smoke dissipate and wire was not glowing once I removed some of the electrical load. My FO was very helpful as we quickly sorted through the issue as a team. I believe there was an electrical short to the lights which caused visible smoke and noticeable heat.