Gov. Gray Davis has rejected the reappointment of P. Gregory Conlon to the California Public Utilities Commission, leaving the five-member panel with just three commissioners. Conlon's six-year term expired Jan. 1, but former Gov. Pete Wilson had reappointed him, pending approval by Davis and the state Legislature. Conlon's name was included this week on a long list of nominees withdrawn by Davis. Conlon had expected to be approved for a new term or allowed to serve until a replacement was named, so Davis' action came as a surprise--so much so that when word reached the PUC, Conlon had to catch a ride home with someone because he was no longer eligible to drive his state-issued car. Conlon, busy packing boxes in his office, said he wants one of the open PUC seats and pledged to "pursue it vigorously" through Davis' office. The second vacancy was created by the retirement of Jesse J. Knight Jr., whose term also expired Jan. 1.