Law doesn't allow for PUD dam
Sheets could research the origin and meaning of the odd, key phrase and do us all a favor. Back in the 1980s I heard that it had to do with allowing property owners along State Scenic Rivers (as opposed to federal "Wild" and Scenic, where the rules are stricter) to continue to maintain their (already existing) rip-rap bank armoring. Rip-rap extends into the river channel, and thus does not "maintain natural flow conditions'' but its effects on flow are typically minor and localized. A legal loophole was needed to protect the existing rip-rap exceptions to natural river flow or the SRA would lack the political support to pass as a bill and become state law. The "loophole," in other words, is meant to be a protection for the "little guy" who can't afford to relocate his cabin or access road if the floods take out his rip-rap. It is not meant as a legal shoehorn to be used to allow ambitious engineers to build dams whenever and wherever they see an opportunity to make money. This loophole also protects the Department of Fish and Wildlife's right to take water out of the river for their fish trap.
A dam, though, no matter how much lipstick you put on it, is still a dam, and by drying up the two most beautiful waterfalls on the whole scenic river, SNOPUD's proposed dam clearly runs counter to the letter and intent of the SRA, which is primarily to preserve the beauty, not minimize the ugliness of things which destroy the beauty.
And, let's stop using ordinary salmon as sacred red herrings here. They are as irrelevant to the core issue as SNOPUD'S design details and cost projections. By state law this river is already spoken for, and unavailable as a source of commercial hydro-power.