California Avoids Blackouts a Third Day With More Tests Looming

California’s power grid once again didn’t break despite being stretched to the limit as a punishing heat wave continues to test the state’s ability to keep the lights on.

The grid operator late Wednesday canceled an emergency without having to resort to planned outages. It was the third day in a row that’s happened, and the eighth straight that the state has called on consumers to conserve power as extreme temperatures cause air-conditioning use to rise.

Thursday promises to be another tense standoff, with demand forecast near a record high set Tuesday and the California Independent System Operator, or Caiso, ...