Earlier this year, state Sen. Phil King filed a lawsuit against Oncor, the company that owns and operates power lines throughout much of North and West Texas, and its customers, some of whom are among his constituents. took the unusual step of intervening in the dispute.
In June 2023, Oncor asked the Texas Public Utilities Commission for permission to charge ratepayers higher rates to offset the $153 million cost of repairing and expanding the city’s power lines. was. It then applied for an additional $56 million in September of the same year, and $81 million in March of the following year. Lawyers representing the federation of municipalities pushed back, arguing that Oncor could not seek to pass on costs more than twice in a 12-month period. In response, Oncor said the limit is two per calendar year.
King, a Republican from Weatherford, about a 45-minute drive west of Fort Worth, would allow utility monopolies such as Oncor to request reimbursement for expenses once every six months instead of once a year. He was drafting a bill for 2023. He weighed in in a letter to the PUC, writing that the customer’s arguments represented an “irrational interpretation” of his bill. The commission, all appointed by Republican Gov. Greg Abbott, sided with Onkor and King.
The bill – Senate Bill 1015 – was one of four bills drafted by Dr. King during the last session to make significant changes to how Texas’ regulated electric utilities operate. SB 1015 proved to be an economic benefit to Oncor. The company said in a filing with the U.S. Securities and Exchange Commission that the changes enacted by the bill resulted in an increase in revenue of more than $50 million in 2023.
In addition to allowing Oncor and other power companies to request rate increases twice a year, SB 1015 limited the ability of local governments in the state to combat unreasonable utility spending. Tina Paez, Houston’s regulatory director, testified that the bill “replaces a balanced regulatory framework with de facto utility self-regulation.” Bill Kelly, who served as Houston’s government relations director until earlier this year, said King’s bill appears to be retribution against a city that has been a strong advocate on behalf of its residents. That would be “like dropping a nuclear bomb because you’re angry that we won,” he said.
Phil King is known to be friendly to companies such as Oncor. A Wall Street analyst I spoke to called him “Mr. utility. “Over the past two years, the state political action committee representing the electricity supply industry has donated $20,000 to Dr. King’s re-election campaign, and Oncor’s CEO has personally personally checked checks totaling $27,500. I cut two pieces.
But Mr. Onko’s relationship with Mr. King goes much deeper than campaign contributions. Since 2018, Oncor has spent $31 million on contracts with SelectMat, a company co-founded by King. His son, Joshua King, served as Select Matt’s chief executive officer from mid-2017 to mid-2021 and remains executive vice president and partner, according to the younger King’s LinkedIn page ( Phil King told Texas Monthly that he sold a minority stake in the company earlier this year.
Texas’ public ethics rules, considered the most lenient in the nation, make it legal for lawmakers to make money by doing business with regulated companies. Still, Mr. King’s financial entanglements raise questions about whether he had an interest in his own business when he drafted SB 1015 and other bills, and when he intervened in Oncor’s PUC disputes with customers. , or whether he was interested in the state’s business.
In response to a written question from Texas Monthly about whether his ownership of Select Mat constitutes a conflict of interest, Mr. King sent the following statement: Disclosure of personal and corporate financial information. ”
King’s latest personal financial report, a document that all lawmakers are required to submit annually to the Texas Ethics Commission, covers the years through 2023. It has been revealed that a limited liability company owned by King holds a minority interest in Select Mat worth at least $50,540. This amount is the maximum financial return on a particular investment that lawmakers like Dr. King must disclose. The form does not say whether his bet is worth $55,000, $55 million, or more, nor is it necessary for Dr. King to say so.
“It’s disappointing, but it’s expected in Texas,” said Alison Silverstein, a Texas energy consultant who previously served as senior adviser to the Republican-appointed chairman of the Federal Energy Regulatory Commission. . He noted that conflict of interest requirements prohibit state employees from becoming co-owners of companies that do business with another company they regulate. However, state legislators are not bound by such ethics rules. “If we lived in a good government, members of Congress might be prohibited from owning companies that do business with the people they govern. But we are not a good government.”
When asked by Texas Monthly about Dr. King’s potential conflicts of interest, Lt. Gov. Dan Patrick defended the practice of lawmakers writing, supporting or opposing legislation that overlaps with their professional interests. “Texans benefit from the vast experience our senators bring to the table, and we trust them to act with the highest integrity.” “I will always work to ensure that the Texas Senate serves the best interests of the people.”
For the past quarter century, King, now 68, has served as a member of the Texas state legislature, amassing influence and power. The state Senate website lists his occupation as an attorney and small business owner. He is slender with a full head of gray hair and wears a well-tailored suit befitting a successful small-town lawyer.
During the last Congress, he was appointed vice chairman of the Senate Commerce Committee. As such, he oversees the state’s $30 billion electricity market, $240 billion insurance market and other industries. For this complex and important public service, he is paid $7,200 a year plus a cost-of-living allowance. There are many such people among Texas citizen legislators.
King co-founded Select Mat in 2017, which leases construction mats to utilities, construction companies and companies in other industries, often for work in wetlands. Mats are made of wood or composite materials. Wesley Speed, Oncor’s vice president of transmission at the time, said in prepared testimony before the PUC in 2022 that the company used mats for two main reasons. This was to prevent heavy construction equipment from getting stuck in the mud and to protect buried pipelines. It typically costs $250,000 per month to lease one mile’s worth of construction mats. Oncor told Texas Monthly that it has spent $218 million on matting since 2018, including $31 million paid for Select Matte.
Mr. King’s partners in the business are state Rep. Cecil Bell Jr., whose district north of Houston includes Magnolia, where SelectMatt is based, and Long Island businessman Cecil Bell Jr., who worked for the U.S. State Department during the Trump administration. It was Rabbi Arie Lightstone, who entered the ministry. In an article about Lightstone published jointly by ProPublica and The Forward, a person who answered the phone at Select Matt described the company’s origins as “a group of people who came together because they saw an opportunity in the market.” I am quoting. Bell did not respond to messages left at his office. Attempts to reach the Lightstone were unsuccessful.
Oncor spokeswoman Kelly Dunn said the company leased the business from SelectMatt in 2018 after soliciting bids and selecting the business “based on its ability to provide safe and timely service at a competitive price.” He said he chose to do so. It added: “Any claims or insinuations of quid pro quo or conflicts of interest are false and inaccurate.”
A request to the Public Utilities Commission did not provide any information about which other mat companies Oncor, or its Houston-area counterpart CenterPoint Energy, leases mats from. CenterPoint told Texas Monthly it has no record of a contract with Select Matt. Select Mat’s website and social media accounts tout its partnerships with pipeline and power companies, but the company does not provide details about which companies it is working with.
Andrew Kates, an Austin lawyer and author of many books on the ethics of Texas politics, said voters are left with the responsibility to judge the ethics of their elected officials because the rules they impose on themselves are relatively lax. He said it must be done. “The people are not stupid. I get it. You can connect the dots and put two and two together. If there’s anger about it, some people hope it’s reflected at the ballot box. But that may no longer be an issue because Congress is gerrymandering districts that favor Republicans like Dr. King, he said.
After 24 years in the state House of Representatives, King was elected to the state Senate in 2022 after the 10th District’s boundaries 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 partisan trends have changed after the 2021 redistricting. The district that moved the most to the right was the 10th District. Incumbent Democrat Beverly Powell said at the time that the partisan mapmakers had made a “direct attack on the voting rights of minority citizens,” and withdrew from the race, saying the race was “unwinnable,” and King was left unopposed. I decided to run by voting. This year, he faces Democratic opponent Andy Morris, who ultimately reported raising just over $8,000 for his campaign.
“Lawmakers can hang on to their jobs and remain unaffected by voters and the ballot box,” he wrote in his book on gerrymandering with the unprintable title Rat F**ked: Why Your Vote Doesn’t. says David Daly, author of ‘t Count. “There is little way to hold legislators accountable when they are drawn into gerrymandered noncompetitive districts that they can never lose.”
Texas’ citizen-legislator government model makes it difficult for legislators to disclose who supports their campaigns, how they make a living, and what assets they own. being sought after. The idea is that if they disclose their sources of income and voters believe they are inconsistent, they can be voted out. But for this system to work effectively, we need competitive elections and transparent financial reporting, neither of which are evident here.
Sascha von Aldershausen contributed reporting to this article.
When you buy books using links on this page, a portion of your purchase goes to independent bookstores, and Texas Monthly receives a commission. Thank you for supporting our journalism.
Read next
