It means regulator Shane Lynch is likely to refer the matter to the Competition Commission.
The proposals would slash how much money Phoenix is allowed to invest and spend on running its network.
The savings would then be passed on to Northern Ireland’s biggest gas users.
It’s estimated that around 50 big customers could save more than £10,000 a year.
But Phoenix, which is owned by private equity giant Terra Firma, believes the regulator is re-writing the rules unfairly.
It argued that the changes could ultimately cost customers more, because it may have to pay more for its debt on the international markets.
Phoenix outlined its objections to the regulator’s approach in a strongly worded statement.
“It is particularly unfortunate that the authority’s final decisions paper and response to its consultation contain a misapprehension of, and only partial response to, the points we have made as well as a serious mischaracterisation of the agreement reached between the authority and Phoenix in 2006 and implemented via modifications to our licence in 2007.
“It remains our strongly held view that the authority’s proposals risk causing Phoenix, its shareholder, and ultimately consumers, significant and unwarranted harm.”
The controls would knock £74.4 million off the company’s value, around 17% – based on its Regulatory Asset Base.
In October the ratings agency Fitch placed Phoenix’s bond borrowings on downgrade alert on the basis of the regulator’s draft proposals.
It said then that it was likely Phoenix would see its debt downgraded by one notch if the regulator proceeded as indicated.
It’s understood Fitch has since written to the regulator, Shane Lynch, explaining why it may be forced to downgrade Phoenix, which would increase the cost of its debt.
Phoenix is the monopoly owner of Northern Ireland’s gas distribution network in the greater Belfast area and is therefore regulated.
Firmus Energy owns a network outside Belfast and competes with Phoenix to supply gas on the Belfast network.