God I hope the scenario you envision doesn't come to pass. My thoughts aren't so dire, for example:

Parital production in hatcheries is fairly commonplace, due to varying run sizes that occur on rivers year after year. In a monster the size of the Cowlitz hatchery, I would expect that running the hatchery on partial production, while remodeling could be done.

There are also two hatcheries; couldn't the salmon hatchery lend some production space as well? Don't they already raise and release the B-run winter fish that cruise past the Barrier Dam in March and April?

I just can't see Cowlitz production falling to zero, even if they want to reestablish wild fish. This river has been the top WA producer for over 20 years; news of no runs could quite likely have a substantial affect on license sales, which just means less revenue all around.

It seems to me that this would be letting Tacoma PUD off the hook in providing mitigation for their dams. And they're dreaming if they think they can restore wild runs anywhere near historical levels. Not with two giant lakes in the system that used to hold spawning water. Wild juveniles may also run into the same predation problems that they run into on the Columbia or Lake Washington (how many juvenile steelhead can a 50 inch tiger musky eat?). It wouldn't take to much thought to determine that the costs to plant, truck, and monitor populations could be well in excess of operating a hatchery.

Lastly, why would funding be an issue? Shouldn't the PUD flip the bill for hatchery restoration?

I don't know, maybe these thoughts merely reflect a lack of complete understanding of the issues, but it just seems to me that the WDFW is embattled enough without eliminating the #1 steelhead stream in the State. But then again....