Talk of rebuilding Teton Dam, together with the drought and a lawsuit, has spawned a conservation controversy over the use of Idaho's water.

The fracas pits conservationists against water developers, whose different stands on the need for Teton follow a drought-fueled trend in Idaho toward squabbling over limited water supplies.The dam failed in June 1976, causing 11 deaths, destroying thousands of homes, killing thousands of cattle and causing an estimated $500 million in damage. An ad hoc legislative panel voted Tuesday to make a fact-finding tour of the site on Nov. 21.

The Shoshone-Bannock Tribes, an unexpected ally in the project, would like to bankroll the $150 million rebuilding, along with the Fremont-Madison Irrigation District and the city of Rexburg. The city of Idaho Falls also has indicated an interest.

However, Idaho conservationists question the need. Even if a need could be shown, water conservation would be a far cheaper solution, they say.

Conservationists also point out that the Upper Snake already has substantial water storage, including several federally funded projects that are part of the District 1 Water Bank, and the bank has supplied extra water to irrigators and other users even in drought years such as 1987-88.

The Upper Snake River chapter of Trout Unlimited has filed suit to block the U.S. Bureau of Reclamation from dropping the outflow from Palisades Reservoir to 750 cubic feet per second. The bureau wants to store water for next irrigation season, but TU seeks a minimum flow to avoid ruining the prize trout fishery on the South Fork of the Snake River.

Rep. Reed Hanson, R-Idaho Falls, a potato farmer and former Water Board member, and other water officials bristle at charges that water conservation could serve as an alternative to a new Teton Dam. Few environmentalists understand the complexity of the Snake Plain irrigation system, he said.

Jeff Fereday, a Boise water rights attorney, agreed that there might be a conservation alternative to Teton Dam, if the dam were needed at all. But, he said, "I have not yet seen a convincing case for additional surface storage in the Upper Snake."

If a need for more storage could be shown, Fereday said, there is strong potential for developing at least some of it in the Snake Plain aquifer under recharge systems holding water rights for that purpose.

As it is now, he said, the recharge occurring as a by-product of the wasteful irrigation practices is not guaranteed by a water right.

The strict application of Idaho water law presumably will come to the Upper Snake in the form of the Snake River Basin Adjudication.

The adjudication, which requires water users to document their water rights and to justify their beneficial use according to legal standards, is being accomplished for the first time in the Snake River Basin, in part to clean up antiquated water practices and to halt unauthorized water use. Launched in January 1988, it is expected to take 10 years to complete.