Energy company AGL is challenging a proposed cut to electricity prices in South Australia.
In a statement, AGL said it had launched legal proceedings in the Supreme Court.
The state's energy regulator, the Essential Services Commission, is planning a reduction of 8.1 per cent in electricity prices for consumers with standing, rather than market, contracts.
That is expected to save residential customers an average of $160 annually, but most South Australians are on market contracts, which are not price-regulated.
AGL said the Commission had wrongly exercised its power to review prices citing "special circumstances".
The Commission was set to make a final determination before Christmas, but CEO Paul Kerin said the legal action could delay that.
"AGL has a legal right to ask for a judicial review of our special circumstances decision.
Ideally we would hope it would be before Christmas, but it is possible it would extend beyond that," he said.
Acting Energy Minister John Rau said the SA Government would watch the legal developments closely.
"They're entitled to go to court just like anyone else is," he said.
"If what they're trying to do is clip the wings of the regulator I'd have to have a very serious look at it." SA Premier Jay Weatherill said the Essential Services Commission was right to test AGL's standard contract price.
"Energy retailers are free to pursue their legal rights and that's what AGL has done in this situation but we want energy retailers to do the right thing by consumers.
We want a strong regulator that holds their feet to the fire in relation to energy prices, that's what the regulator has sought to do," he said.
The executive director of welfare organisation, the South Australian Council of Social Service, Ross Womersley, said the decisions of regulators across Australia often faced challenges from power providers.
"They continue to win, now some of that is because they have a vast body of resources at their disposal, both technical and legal, and they will use those to protect their interests, which of course is making the maximum profit they possibly can for their shareholders," he said.