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This paper presents two techniques for optimal tracking of power system voltage phasors and frequency deviation. The first technique is based on a two-state linear Kalman filter model. The second technique is based on a three-state extended Kalman filter model. In the latter the frequency deviation is considered a third state variable and is recursively computed on-line. It is shown that the Kalman filter models are well suited for noisy measurements. The effect of sampling rate, computer burden and overall accuracy are also investigated. Finally comparison with other techniques is presented.