SANTA FE, N.M. (AP) — State regulators have rescinded a decision that allowed New Mexico's largest electric utility to increase rates for customers but limited the amount of money it could recoup on upgrades at a coal-fired power plant.

The state Public Regulation Commission on Wednesday backed away from the decision and granted the Public Service Co. of New Mexico a new hearing on rate proposals scheduled for next week, the Santa Fe New Mexican reported .

The commission had voted last month to allow the utility to raise rates by about 9 percent for the average customer over the next two years...