GREENVILLE – An independent appraiser has suggested that the fair market value of the Greenville Steam Co.’s biomass facility, the town’s largest taxpayer, is $2 million, not the $9.6 million value placed on it by the town.

The appraisal was commissioned jointly by the town and the steam company after Greenville Steam Co. officials balked last year over the valuation and the $180,000 in property taxes it paid each year.

After receiving town meeting approval for the appraisal, selectmen selected a New Hampshire firm that specializes in commercial appraisals. That selection met the approval of steam company officials, who are sharing the $10,000 appraisal costs.

While town officials expected some difference between the independent appraisal and the town’s valuation, they had not anticipated such a large gap.

“It was a surprise,” board Chairman Eugene Murray said Friday. He said the information obtained in the appraisal will be checked out and discussions will be held with steam company officials in an attempt to reach a compromise.

Scott Hersey, Greenville Steam Co. plant manager, said Friday an analysis done by his company determined the town’s valuation was too high. “Considering what’s going on in the marketplace, we were not surprised at that [lower] value,” he said.

Hersey told municipal officials last year that the company had made every effort to reduce costs in preparation for a future made uncertain by deregulation, but high property taxes offset the savings. He said property taxes are the company’s third-highest expense behind wood fuel and labor. The company has a contract with an Atlanta-based broker for the electricity the plant produces, according to Hersey.

Hersey said the company wants to be a good neighbor and is trying to be fair, but when the competition is paying less in property taxes it becomes a disadvantage.

Town Manager John Simko said the town has maintained a very “positive” relationship with steam company officials. Both the town and the company have financial concerns, he said.

A major reduction in the 15-megawatt steam plant’s value would affect the valuation placed on the town by the state, according to Simko.

The state has valued the property at $10.6 million. Any dispute with the state valuation must be aired before the Legislature by Oct. 1 so time is limited, he said Thursday.

Simko said it was clear the assessment will be reduced, but even so he expects the overall increase in the tax rate for the town will be no more than 1 mill when the commitment is determined later this month.

The municipal and school budgets initially reflected a two-tenths of 1 percent increase, a minimal increase, he said. In addition, the state valuation was “flat-funded,” meaning selectmen used the same state valuation as the previous year’s to determine the budget in anticipation of any municipal changes in valuation.

Any new development since then could help absorb a reduction in the steam company’s valuation, he said, but regardless, it will have an impact on the town.

Selectmen are expected to set the tax commitment at their Sept. 19 meeting when it will be determined what valuation will be set for the steam company.