Phelps was first elected to the Yukon Territorial Council in 1974, but his election was overturned in 1975 after Don Branigan filed for a court injunction on the grounds that as the government was renting space in Phelps' commercial real estate holdings for some of its liquor stores, his serving on the council placed him in a conflict of interest.
When John Ostashek's Yukon Party took power in 1992 with a minority government, Phelps lent his support and became minister of justice, health and social services.
Phelps ran for re-election but lost his seat in the fall election.
Phelps formed the United Citizens Party of Yukon in 2009 to oppose the government of Dennis Fentie.
He resigned as the party leader on May 9, 2011 for health reasons and due to waning interest.