IV. CONCLUSION

For the reasons discussed above, D.07-04-046 is modified as specified herein. Limited rehearing will be granted to consider whether San Gabriel violated Rule 1 by failing to disclose certain information in its GRC submittal related to its purchase of real property from its affiliate Rosemead Properties, Inc. Parties in the next San Gabriel GRC for the Fontana Water Company Division will be permitted to address post 2002 construction projects. We will modify the Decision to clarify that it does not address possible future tax consequences related to the Internal Revenue Code section 1033 election. We will modify the Decision to add and delete findings of fact for purposes of clarification. Except as to the Rule 1 issues upon which we grant limited rehearing, rehearing of the Decision, as modified, is denied in all other respects.

THEREFORE, IT IS ORDERED that:

1. Limited rehearing of D.07-04-046 is granted to consider whether San Gabriel violated Rule 1 by failing to disclose certain information in its GRC submittal related to its purchase of real property from its affiliate Rosemead Properties, Inc and, if so, whether penalties should be imposed. The Assigned Administrative Law Judge is directed to issue a ruling which will notify parties regarding the procedure and schedule for this limited rehearing.

2. Parties in the next San Gabriel Water Company GRC for the Fontana Water Company Division will be permitted to address the reasonableness of post 2002 construction projects. Parties may not revisit issues that are explicitly addressed and decided in D.07-04-046.

3. D.07-04-046 is modified as follows:

a. The last sentence starting on page 5 and continuing onto page 6, beginning with the phrase "DRA's witness testified," is deleted and replaced with the following:

"DRA's witness testified that no information has been provided regarding the projected amounts CSI intends to self provide as compared to its owned water rights.

b. After the last full paragraph on page 97, before heading number "3" a new sentence is added as follows:

"This decision does not address future tax consequences of the section 1033 election."

c. In the first sentence of the third full paragraph on page 104 the word the word "do" is deleted and replaced by the words "appear to."

4. Beginning with the second full paragraph on page 105 and continuing through page 109 just before the heading, "XVI," inclusive, the text is deleted.

d. A new Finding of Fact is added to read:

"The risk analysis for contamination proceeds is similar to real property and a similar allocation is warranted in this case."

e. Findings of Fact 86, 87 and 88 are deleted.

6. Other than the limited rehearing ordered in Paragraph 1, above, rehearing of D.07-04-046, as modified herein, is denied in all other respects.

This order is effective today.

Dated June 12, 2008, at San Francisco, California.

MICHAEL R. PEEVEY

President

DIAN M. GRUENEICH

JOHN A. BOHN

RACHELLE B. CHONG

TIMOTHY ALAN SIMON

Commissioners