The prime reasons for power quality degradation include voltage sag, swell and momentary interruptions and also the presence of harmonics. Thus accurate computation of harmonics is really a challenging problem in power system. Many algorithms have been proposed for harmonic estimation to improve the power quality. In this paper the Forgetting Factor RLS (FFRLS) approach has been considered to estimate not only voltage sag, swell, momentary interruption but also the amplitudes and phases of harmonics in case of time varying power signals in presence of White Gaussian Noise. Also comparison results with LMS and NLMS algorithms are presented to show the effectiveness of the proposed RLS algorithm.