If you're not sure about how Power Pips work, or how to get them, you can redo the tutorial where they are explained. Just create a new character (you can have 6 at a time) and Merle will describe them to you.
Here are some basics.
You don't start getting awarded Power Pips until you are level 10.
Power pips are granted at random to you, based on your Power Pip percentage shown in your character screen (press C when not in combat)
Power Pips count towards your base school as TWO pips. For example, if you have one normal pip and one power pip, you can cast a spell that costs THREE pips in your base school, or a spell that casts TWO pips in your secondary schools.