Tempest,
In addition to long term supply and demand, it is very common to see hiccup in a market economy when the demand or supply crashes that causes something that doesn't make sense: i.e. having to pay people to take power or charging 4x as much as recent past.
This is not the fault of the regulator regulating too much, but more of the inherit instability issue in the energy business. You can't predict weather, oil price, coal mine strike, drought, grid accident (or sabotage from Enron), and therefore you just have to accept the possibility of inefficiency here and there, and factor it into the cost.
This, my friend, is also something inevitable in a market economy. As long as this inefficiency isn't fatal, it is a cost of doing business and should be factored in as such.
Having a power plant to pay someone to take its energy at midnight vs having to pay someone for more expensive solar energy at 3pm isn't "inefficiency" unless you can get free storage. This is not because of regulator stupidity, but market economy, because it is cheaper than the alternative (i.e. $100k diesel start up cost)