The annual consumption of electricity of residential customers in Baja California increased from 917 kWh/person in 1996 to 1057 kWh/person in 2003. The federal government reduced subsidies in 2004, and household consumption dropped to 953 kWh/hsehld, a logical response to the price elasticity. However, the ratio of total annual consumption of electricity to the population increased from 2682 kWh/person in 1996 to 3199 kWh/person in 2004. Industrial consumption increased at a rate 2-times higher than residential consumption, whereas other sectors grew at much slower rates, which can be attributed to the development of companies with more intensive energy use, associated with higher prices of electricity for residential, commercial, and public utilities. The supply side planning cannot predict and evaluate social and economic consequences of such policies.