Saying the deal is "Not in the public interest," the State Public Service Commission Thursday rejected Entergy Corporation's plan to spin off its six nuclear power plants, including Indian Point, into a separate company.

The PSC said its primary reason for turning down the proposed deal is that the resulting company--Enexus Energy Corporation -- would be financially shaky.

Last month, the PSC said that because the three New York power plants cover 15 percent of the state's energy consumption, they cannot afford to fail. It says should  the company became insolvent and be unable to  operate the plant, the public would be affected and rates would go up. Entergy responded by restructuring debt and promising to restrict dividend payouts to shareholders. Despite the proposed changes, the PSC denied the request on Thursday. Entergy says its board will meet shortly and be briefed on the situation.

In addition to the two power plants at Indian Point, the New Orleans-based Entergy operates the James A Fitzpatrick Station in Oswego County, NY, The Palisades Power Plant in Covert, Michigan, Vermont Yankee in Vernon, Vermont, and the Pilgrim Nuclear Station near Plymouth, Massachussetts.