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The measurands from the remote location are gathered at central control room (CCR) for processing, taking corrective action and presenting to higher hierarchy in a presentable format and it requires remote terminal unit to communicate between them. The pre-processing of current has been done using fuzzy logic algorithm for pre-processing the measurands at RTU for further action. It is noted that the estimated values are near to fuzzy pre-processing values and far away from measured values. In this paper, the authors have taken into account the fuzzy pre-processed values to be used by the state estimator instead of estimated value and also assumed that in the present scenario the protection unit must operate at the same operating point as before. Thus, tuning of fuzzy membership function is done to ensure the reliable operation of the operating unit.