I've heard various ideas such as limiting it only after mods have expended their points (this will require implementing a cooldown to prevent a user from getting points again too soon). I want to hear your feedback, and I'll roll together something for the next major update of the site. Leave your comments
It is outlined in the first few sentences of the Moderation Guidelines. [soylentnews.org]
Maybe we should make a big link to this doc the first few times a user receives mod points.