http://www.d20pfsrd.com/bestiary/monster-listings/fey/kelpie/
So the Kelpie is somewhere between "nearly completely ineffective" and "nigh guaranteed to kill a player of the appropriate level."
If the player would hold their breath, the kelpie will usually have to drown them for 25 rounds or more. While they offer no resistance; it's fairly strange since a Harpy (who has a similar ability that affects all the players) will probably kill you in a couple full-attack actions.
This makes me think "maybe the person who offers no resistance and is under the charm is not holding their breath"; but I doubt it.
_________
I do understand it'd be more interesting if it wasn't used as a singleton creature; but my goodness; how many combats last 25+ rounds? Certainly none that I've ever run (they usually start to drag if they make it to 10-15 in and I'd say that if they last 25 it's either very well designed or very badly designed; depending on if it's still entertaining.)
I am assuming the player holds their breath; but it's obviously such a giant power difference that the ability may as well not be there at that point. If it's "they don't hold their breath" then I'll need to be more careful (as will the players) in employing it.
Thanks!
EDIT: I guess a third option would be to start without holding their breath; in which the rounds are non-deterministic because they have to fail a check before they begin drowning; upping the time from 3 rounds to 7 or something; which starts to sound like what it should be.
Nothing in the text implies to me that a captivated character wouldn't hold their breath. If the kelpie is in a hurry, it can simply coup de grâce its victim.
This isn't really an ability designed to end combat against multiple foes. It's a thematic ability that can cause some grief to a party when they have to go out of their way to keep their friend from jumping into the water (or fish them out) while still having to deal with their foe(s). It's a good ability, though, as it effectively neutralizes one enemy per day if they fail their saving throw.