PORTLAND — A billing mistake at a Portland brewery that cost the city as much as $1.5 million in lost revenue over 15 years was not significant enough to affect overall sewer rates, a city official said Wednesday.

Spokeswoman Nicole Clegg acknowledged that there were costs associated with treating the wastewater portion of the 201 million gallons of water that Shipyard Brewing Co. used without paying sewer fees over that time period.

Because most of the costs for transporting and treating the city’s sewage are fixed, she said, the costs associated with Shipyard’s uncollected fees were absorbed into the city’s sewer district budget in a way that did not affect sewer rates.

But City Councilor Ed Suslovic, who is calling for an independent investigation, said Clegg’s explanation doesn’t make sense. The failure to collect payments from Shipyard means the city either had less money to spend or it raised sewer fees, he said.

“To say otherwise sends a message that it’s really not that important that people pay their sewer bill,” Suslovic said.

The city discovered the mistake a year ago but didn’t begin investigating until December.

Clegg said last week that the investigation would be concluded by the end of this week. On Wednesday, however, she said the complex investigation may not be completed until next week.

In 1996, two years after Shipyard opened in Portland, the brewery added a second water line to its plant on Newbury Street. But a sewer account wasn’t set up for the new 6-inch line, and the brewery did not begin paying sewer fees on it until March 2011.

Ron Miller, general manager of the water district, said city officials never told his staff to set up an account for the second Shipyard water line. When water district employees raised questions, he said, they were told by a city worker that all the water in the line was going into bottles, not the sewer system.

But the Brewers Association, a national trade group, estimates that a typical brewery uses two to six gallons of water for every gallon of beer it produces.

As a result of the billing error, Shipyard was not billed for sewer fees on a line that supplied 201 million gallons of water over 15 years. But the mistake did not affect Portland sewer rates because that was a tiny fraction of the 28.8 billion gallons of water used by city residents and businesses over the same period, Clegg said.

As a percentage of total water consumption in Portland, Shipyard’s annual water use on that line ranged from 0.2 percent in fiscal year 1997 to 1.4 percent in 2010, the most recent year for which information is available, according to figures supplied by the city.

“When it’s a small enough piece, and spread wide enough, it doesn’t affect the rate, which determines how much people pay,” she said.

The city of Portland is responsible for the sewer line system that collects sewage and wastewater from business and residential users and sends it to the East End Wastewater Treatment Facility, which is operated by the Portland Water District. Because sewer charges are based on water use, the water district, a quasi-municipal agency, bills sewer customers on behalf of the city.

Sewer bill revenue is sent to the city, and the city uses a portion of it to pay the district for wastewater treatment. The city has paid the district a flat fee of $10.5 million each of the last two years for wastewater treatment.

Debt service payments that fund sewer system improvements account for another quarter of the city’s $21 million annual sewer budget, and system maintenance accounts for the rest.

Even though the district collects the fees from city sewer users, the city is ultimately responsible for paying the sewer bills, Clegg said.

Shipyard President Fred Forsley said he was never aware that Shipyard wasn’t being billed for all the sewer fees it owed. Forsley said he has been assured by the city that the mistake did not affect sewer rates.

Clegg said the city is taking the investigation seriously.

“Just because the amount of money that wasn’t billed isn’t statistically significant doesn’t mean that we don’t think that it’s important that we get to the bottom of this and take appropriate steps to make sure this doesn’t happen again,” she said.

City Manager Mark Rees has said it’s evident there was a communication problem between the city and the water district, and he is considering drafting a memorandum of understanding between the city and the district to “make sure everybody is clear on what everybody’s responsibilities are.”

Portland sewer rates have increased sharply in recent years to pay for the second $60 million phase of a sewer system upgrade to reduce the amount of stormwater that enters the system. During heavy storms, combined flows of rainwater and wastewater spill untreated into Casco Bay. The project’s next phase will cost $169 million, and city officials have yet to decide how to pay for it.

Suslovic, who chairs a task force that is looking at funding options, said public acceptance of any tax or fee system depends on the perception that everybody is paying their fair share.

That’s why it’s critical that the city correct the issues that led to the error at Shipyard, he said.

“The integrity of the system is very important to maintain the public trust and the willingness for everyone to pay their bills,” he said.

Staff Writer Tom Bell can be contacted at 791-6369 or at:

tbell@mainetoday.com

Twitter: TomBellPortland