Recently, our Palladium GM (Pete) has been talking a lot about how difficult it is to challenge a psi-equipped party, and I've seen it in action... parties with fair to middling psionic powers can do a lot of damage, find out a lot of information, and recover fairly quickly... and all at lightning pace, since psionic powers only require 1 attack to do things that would require 2 for a spell-caster (assuming an average character has 4 attacks, and 2 spell attacks with 1-6th level spells).

However, what psionics should require, much more than magic, is concentration. A magician shapes a construct with words of power, fills it with P.P.E., and can then let it exist independently. A psionic, however, uses powers forged out of their own will... the things they create and the effects they cause do not exist outside of their will.

Thus, I suggest a simple fix to reign in the power of psychics: Any power with a duration is the only psychic or magical activity that may be used while the duration continues (Mind Block Auto-Defense might be an exception, though the restrictions I put on Mind Block limit some of the abuses that this might cause). Thus, Mind Bolt, which has a duration of Instant, may be used as many times as they have attacks. With Telekinesis, though, you could not activate another power until you stopped using Telekinesis... you could punch someone in the face, or swing a sword, or carry on a conversation... but you could not activate another power, cast a spell, or purposely activate a ward while the power was still up. Doing so would take away the concentration you needed to do it.