An image of the flood. June 5, 1976.
What would it mean for the trout in the Teton River if the dam were constructed? I couldn't even begin to guess. But I can't see it being a positive development for the native cutthroat, which are currently on the ropes in the once-great stream. (Note that this link is to an article with some outdated information, the regulations have since been altered to Catch and Release on all cutts.) Its within reason to think the dam might be a death knell for the population in the canyon section.
However, this portion of Idaho is dependent on water, and often the trophy trout streams, such as the Henry's Fork and the South Fork are put in the position of having to provide irrigation water as well life giving agua for the fish. Another dam in this system might lighten the load placed on these two jewels. Because the Teton is a tributary of the Henry's Fork, it might be easier to negotiate trout-friendly flows on the Henry's Fork below Island Park Dam if there were a large reservoir farther downstream.
And then there is the possibility of the tailwater fishery below the dam. The lower reaches of the Teton dewater most years and there is no real fishery down there. Could the native cutthroats flourish in a tailwater? I don't know, they haven't done so well below Palisades, and the rainbow population in the Teton certainly complicates the issue. And more 'bows would probably come upstream from the Henry's Fork if there were consistent flows in the Teton.
Anyway, this is a situation that bears watching. I will see if I can track down some comments from the Henry's Fork Foundation. Stay tuned.