To keep tech humming, CA needs wiring upgrade, report says

California’s systems for moving data and delivering energy need major upgrades to keep the state economy competitive, a new report warns.

“California is riding into the 21st century on the back of the Pony Express,” said Micah Weinberg, president of the Bay Area Council Economic Institute.

The institute — the research arm of the Bay Area Council business and public policy group — studies issues important to the region’s economy. And its latest report, to be issued Monday, focuses on two kinds of infrastructure that the report argues aren’t evolving as fast as needed.

If California wants to maintain its leadership role in the tech industry, the state must find ways to increase broadband coverage, both wired and wireless, according to the report. Similarly, as California increases its use of renewable power, the electricity grid must improve, adding flexibility and intelligence.

And government officials — at both the state and local levels — need to find ways to speed up those changes, in some cases by removing regulatory hurdles, in others by providing new financial incentives to infrastructure companies.

“Every day we hear about new products and services coming out of the technology sector, and the sheer speed at which that’s happening requires additional agility at the state level,” said Rufus Jeffris, vice president of communications for the Bay Area Council. “This is not so much an indictment. It’s a road map for how we stay ahead.”

Cities could let communications companies string fiber-optic cable through publicly owned utility conduits — underground pathways for water and sewer lines, for example — rather than forcing the companies to dig their own trenches. The companies would save on a major expense, while the cities could collect fees for access. And the presence of fast, reliable Internet service would help attract Web businesses.

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“Thinking about broadband as an economic engine — we’re seeing that more,” said Jeff Bellisario, a senior research associate at the institute and one of the report’s authors. “Cities are more and more realizing there’s an opportunity to help their residents, not just with faster service but attracting businesses as well.”

The report also urges California to drop or change a regulation that requires telecommunications companies to maintain their old, copper-wire analog networks, even if more modern technologies could fulfill the same roles.

“We’re seeing a blurring of the lines between telephone, cable and the Internet, but we still have the same telecommunications regulations that we had decades ago,” Bellisario said.

The report calls for changing the way we distribute and pay for energy.

As rooftop solar power grows in popularity, California will need a new way of sharing the costs of maintaining the power grid, according to the authors. That’s a deeply controversial topic in many states, pitting utilities worried about their financial future against solar companies that see proposed grid-maintenance fees as an attempt to hobble their industry.

“We don’t want customers to see expenses on their bills that they’re not expecting, but we also want to avoid the 'utility death spiral’ people are talking about,” Bellisario said.

The report sees huge potential in large-scale energy storage, which could smooth out the notoriously uneven output of solar power plants and wind farms. In 2012, California energy regulators ordered the state’s utility companies to buy more than 1.3 gigawatts of electricity storage by 2020 — enough electricity to supply 993,750 typical homes at any given instant.

That’s a good beginning, Bellisario said. But the state could also try offering rebates or other financial incentives for companies that buy energy storage systems. Starting in 2007, California used rebates to encourage the installation of solar arrays, under a temporary program that has now wrapped up in most of the state. It is widely viewed as a success, helping boost the solar industry’s growth in California, and could be a model for encouraging energy storage.

“We’re happy with the start, but more can be done to push the ball down the road,” Bellisario said. “We see energy storage as the linchpin to all of this.”

David R. Baker is a San Francisco Chronicle staff writer. E-mail: dbaker@sfchronicle.com Twitter: @DavidBakerSF