Earlier this year, state senator Phil King took the unusual step of wading into a fight between Oncor, the company that owns and operates the electrical wires throughout much of North and West Texas, and its customers—among them some of his constituents.
Oncor had asked the Public Utility Commission of Texas, in June 2023, for permission to charge its ratepayers higher fees to make up for $153 million in costs it had incurred for repairs and expansion of its local wires. Then it filed for another $56 million that September, plus $81 million the following March. Lawyers representing a coalition of municipal governments pushed back, arguing that Oncor couldn’t ask to pass on its expenses more than twice in a twelve-month period. In response, Oncor said that the limit was twice per calendar year.
King, a Republican from Weatherford, about a 45-minute drive west of Fort Worth, had authored the 2023 bill that allowed utility monopolies such as Oncor to seek reimbursements for their spending semiannually—up from once a year previously. He weighed in with a letter to the PUC, writing that the customers’ argument represented an “irrational reading” of his bill. The commission, all of whose members were appointed by Republican Governor Greg Abbott, sided with Oncor and King.
The bill—Senate Bill 1015—was one of four pieces of legislation King authored during the last session to make significant changes to how Texas’s regulated electric utilities can operate. SB 1015 proved to be a financial boon to Oncor. In a filing with the U.S. Securities and Exchange Commission, the company stated that the changes enacted by the bill generated more than $50 million in incremental revenue in 2023.
In addition to allowing Oncor and other utilities to ask to raise rates twice a year, SB 1015 restricted the ability of municipal governments across the state to fight unreasonable utility expenditures. Tina Paez, Houston’s head of regulatory affairs, testified that the bill would replace a “balanced regulatory framework with what is effectively utility self-regulation.” Bill Kelly, who served as Houston’s director of government relations until earlier this year, said the bill as filed by King appeared to be retaliation against cities for their strong advocacy on behalf of residents. It was, he said, “like dropping a nuclear bomb because you’re mad we won.”
Phil King is known for being friendly to companies such as Oncor. A Wall Street analyst I spoke with referred to him as “Mr. Utility.” In the past two years, the state political action committee that represents the electricity-delivery industry has given King’s reelection campaign $20,000, and Oncor’s chief executive has personally written two checks worth a combined $27,500.
But the relationship between Oncor and King runs much deeper than campaign contributions. Since 2018, Oncor has spent $31 million on contracts with a company, Select Mat, cofounded by King. His son Joshua King was Select Mat’s chief executive from mid-2017 to mid-2021 and remains an executive vice president and partner, according to the younger King’s LinkedIn page. (Phil King told Texas Monthly he sold his minority stake in the company earlier this year.)
The ethics code for public officials in Texas, regarded as among the most lax in the nation, makes it legal for lawmakers to make money from doing business with companies they regulate. Still, King’s financial entanglement raises questions about whether he was tending to his own business or the state’s when he authored SB 1015 and other legislation, as well as when he waded into Oncor’s PUC dispute with its customers.
In response to a written question from Texas Monthly about whether his ownership of Select Mat represented a conflict of interest, King sent a statement that read, in part, “I fully comply with both the letter and spirit of the law with regard to all required personal and business financial disclosures.”
King’s most recent personal financial statement, a document all lawmakers are required to file annually with the Texas Ethics Commission, covers the calendar year 2023. It discloses that a limited liability corporation King owns held a minority interest in Select Mat worth at least $50,540. That amount is the maximum value of the financial interest in a particular investment that legislators such as King must reveal. The form doesn’t state, nor is King required to say, how much more his stake is worth—whether it’s $55,000 or $55 million.
“It is unfortunate, but par for the course in Texas,” said Alison Silverstein, an energy consultant in Texas who previously served as senior adviser to a Republican-appointed chair of the Federal Energy Regulatory Commission. She pointed out that a state employee would be barred by conflict of interest requirements from being a part owner of a company that did business with another company the employee regulated. But state lawmakers aren’t bound by such ethics rules. “If we lived in a good-government state, it might be prohibited for any legislator to own a company that did business with the people he governs. But we don’t live in a good-government state.”
When asked by Texas Monthly about King’s potential conflict of interest, lieutenant governor Dan Patrick defended the practice of lawmakers writing, supporting, or opposing bills that overlap with their professional interests. “Texans are benefitted by the vast experiences senators bring to the table. I believe our senators conduct themselves with high integrity,” he said. “I will always ensure that the Texas Senate puts the people’s interests first.”
For the past quarter century, the now-68-year-old King has been a member of the Texas Legislature, accumulating influence and power. The state Senate’s website lists his occupations as attorney and small-business owner. He is slender, with a full head of white hair, and dresses in well-tailored suits befitting a successful small-town lawyer.
During the last legislative session, he was tapped to be vice chair of the Senate Committee on Business and Commerce. As such, he oversees the state’s $30 billion electricity market and $240 billion insurance market, among other industries. For this complex and consequential public service, he is paid $7,200 a year, plus a stipend for living expenses. Such is the lot of Texas’s citizen legislators.
In 2017 King cofounded Select Mat, which leases construction mats to utilities, building firms, and companies in other industries, often for work in wet areas. The mats are made of wood or composite. Wesley Speed, who was then Oncor’s vice president in charge of transmission, said in prepared testimony before the PUC in 2022 that there were two main reasons the utility used mats: to keep heavy construction equipment from getting stuck in mud and to protect buried pipelines. Leasing a mile’s worth of construction matting typically costs $250,000 a month. Oncor told Texas Monthly it has spent $218 million on matting since 2018, including the $31 million paid to Select Mat.
King’s partners in the business were state representative Cecil Bell Jr., whose district in Houston’s northern suburbs includes Magnolia, where Select Mat is based, and Aryeh Lightstone, a Long Island businessman and rabbi who joined the U.S. State Department during the Trump administration. An article copublished by ProPublica and The Forward about Lightstone quoted someone who answered the phone at Select Mat as describing the origins of the company as “a group of guys that came together and just saw the opportunity in the market.” Bell did not respond to messages left at his office. Efforts to reach Lightstone were unsuccessful.
Kerri Dunn, an Oncor spokeswoman, said the company chose to lease from Select Mat in 2018 after soliciting bids and selecting the business “based on the ability to provide safe, timely services at competitive values.” She added that “any allegation or insinuation of quid pro quo or conflict of interest would be false and inaccurate.”
Requests to the Public Utility Commission didn’t yield any information about which other matting companies Oncor—or its Houston-area counterpart, CenterPoint Energy—has leased mats from. CenterPoint told Texas Monthly it has no record of ever contracting with Select Mat. Select Mat’s website and social media accounts promote its work with pipeline and electric utilities, but the company offers no specifics about which ones it works with.
Andrew Cates, a lawyer in Austin who has written extensively on ethics in Texas politics, said that because of the relatively lax rules legislators impose upon themselves, it’s the voters who must bear responsibility for judging the ethics of elected officials. “The public isn’t stupid. We see; we can connect the dots and put two and two together. One would hope that if there is outrage about it, then it would reflect at the ballot box. But it may not even matter anymore,” he said, because of the Legislature’s gerrymandering of districts to favor Republicans such as King.
After 24 years in the state House, King was elected to the state Senate in 2022, after the boundaries of the Tenth District were changed to make it a safe Republican seat. The Texas Politics Project at the University of Texas analyzed all 31 Senate districts to see how their partisan leanings changed after they were redrawn in 2021. The district that swung furthest to the right was the Tenth District. Incumbent Democrat Beverly Powell said at the time that partisan mapmakers had perpetrated a “direct assault on the voting rights of minority citizens” and dropped out of the race, calling it “unwinnable” and leaving King to run unopposed. This year he faces a Democratic opponent, Andy Morris, who at last report had raised little more than $8,000 for his campaign.
“Lawmakers can entrench themselves in office and make themselves immune to the voters and the ballot box,” said David Daley, author of a book about gerrymandering with an unprintable title: Rat F**ked: Why Your Vote Doesn’t Count. “There is almost no way to hold a lawmaker accountable when they have drawn themselves into a gerrymandered noncompetitive district that they simply cannot lose.”
Texas’s citizen-legislator model of government requires lawmakers to disclose who supports their campaigns, how they earn a living, and what assets they hold. The idea is that they reveal their sources of income, and if voters believe they are conflicted, they can vote them out. To work effectively, however, this system requires competitive elections and transparency in financial reporting, neither of which is evident here.
Sasha von Oldershausen contributed to the reporting of this story.
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