MINNEAPOLIS — State utility regulators have approved Xcel Energy’s plans to retire two of the three units at Minnesota’s largest power plant by 2026, a move that will eliminate the state’s largest emitter of greenhouse gases.

However, the Public Utilities Commission on Thursday rejected Xcel’s plans to add new natural gas generation at the Sherco plant and directed the Minneapolis-based utility to submit a plan for replacing a large chunk of the lost coal generation, the Minneapolis Star Tribune reported.

The PUC asked Xcel to look more closely at renewable energy alternatives — along with the gas plant — to help compensate for the loss of the Sherco coal plants. Regulators also asked the utility to consider measures to reduce customer energy use.

That pleased environmental groups such as Fresh Energy.

“We think this is really good policy,” said J. Drake Hamilton, science policy director for the St. Paul renewable energy research and advocacy group. “It acknowledges state law, which says the commission cannot approve a new fossil fuel plant unless it is in the public interest.”