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The effective harmonics estimation for measuring power signals has become an important issue in the power quality assessment. By reviewing those commonly used Kalman filter-based models, some limitations for harmonics estimation can be observed. In this paper an extended real model of Kalman filter combined with a resetting mechanism for accurately tracking time-varying harmonic components of power signals is presented. The usefulness of the proposed algorithm is demonstrated by a simple laboratory setup with LabVIEW program and the dedicated hardware for harmonics monitoring. Results show that the proposed method can achieve more accurate and robust measurement of harmonic amplitudes and phase angles for the time-varying power signals among compared methods while the uncertainty testing performances required by IEC standard 61000-4-30 are satisfied.