mjhjmtu

I'm playing a kineticist, currently Level 3, and I'm using electric blasts as my primary attack.

My DM has ruled, and I don't exactly disagree, that when I attack an enemy using an electric blast, that any other player making contact with my target will receive the blast damage as well.

This has made me accidentally kill a teammate who was grappled by a manticore. (He was unconscious and dying.)

By extension, if 2 enemies were standing in a puddle of water or were submerged, and I attacked one, would the other receive the damage as well.

I would like to know what the Pathfinder boffins think about this ruling.

No, Pathfinder has no rules about electricity conducting between multiple creatures

There is no general rule about electricity damage that affords it any kind of conductive property. If an effect has the potential to affect multiple targets, that's always explicit, either because it produces an area of effect or because it specifically describes affecting multiple targets. For instance, Chain Lightning has the target parameter:

Targets one primary target, plus one secondary target/level (each of which must be within 30 ft. of the primary target)

And Lightning Bolt says:

You release a powerful stroke of electrical energy that deals 1d6 points of electricity damage per caster level (maximum 10d6) to each creature within its area.

By contrast, the Electric Blast simple kinetic blast power of an Aerokineticist explicitly affects only a single target:

You shoot an arc of electricity to shock a single foe.

All of the simple kinetic blasts include some wording that specifies a single target. If you want an electric blast that does affect multiple targets, the Kineticist's rules offer a way to do it: modify your blast with the chain infusion, which allows you to daisy-chain the effect across multiple targets.

Realistically, electricity doesn't actually conduct very well through people; following a path of least resistance, it generally goes straight to the ground unless impeded by a decent insulator. The visual of an electrified puddle shocking anyone who comes into contact with it is a hollywood/videogame fantasy; the real danger of water around electricity is that most water is a somewhat better conductor of electricity than common materials, and so if you are wet or in water you present a more conductive path to ground than you otherwise would and are more likely to be struck by lightning/arcing electricity.

If your group wants to homebrew some new rules about how electricity damage works, that is of course up to you; it doesn't hurt so long as everyone is having fun. However, as you've seen, it will make using electricity-based attacks more complex, and that might end up being ultimately detrimental to your fun if your primary attack mode is an electric blast.

By RAW, magical electricity does not conduct that way.

Pathfinder is not meant as a physics simulator. According to the Aquatic Adventures Campaign Setting, magical electricity does not behave like natural electricity.

Electricity Spells: While normal electricity, such as that from a natural thunderstorm, tends to disperse in all directions underwater, magical electricity spells hold their integrity enough to have normal effects underwater

As a caveat, this quote (page 46) refers to electricity spells, whereas the kineticist's Kinetic Blast is a supernatural effect rather than a spell. However, the Kinetic Blast is still magical:

All damage from a kinetic blast is treated as magic for the purpose of bypassing damage reduction.

For the Air element, your energy blast option is Electric Blast, which does not mention anything about the electricity conducting through water or creatures.

Blast Type: energy; Damage electricity

You shoot an arc of electricity to shock a single foe.

Lastly, from the description of the aerokineticist, it seems like a fair assumption that they can control the behavior of their own electricity.

Kineticists who focus on the element of air are called aerokineticists. Aerokineticists often control air flow or electricity, specializing in mobility and ranged combat.

On the other hand, the GM's ruling takes priority.

Aquatic physics tend to have confusing implications with Pathfinder's game mechanics, so the GM can houserule that the kineticist's electricity behaves the way that you've described. The RAW has a similar precedent for GM fiat:

Some spells might function differently underwater, subject to GM discretion.