This paper describes the design and application of a linear static Kalman filter based on a Gauss-Markov (GM) process for estimating minor loop flows in wide area systems. The minor loop flows assumed to circulate in the system are estimated from the measurements of the active power flowing in transmission circuits. Typically, the measurements may be noise contaminated; using the noisy data may reduce reliability in estimation. Since, the estimates of the minor loop flows are employed in the monetary accommodation of Unscheduled Flows (USFs) among GENCOs, the estimates are required to be noise free. A linear discrete Kalman filter, used statically, can be employed for this purpose. A Gauss-Markov process is shown to satisfactorily model the minor loop flows.