The paper presents a new method for simultaneous tracking of varying grid impedance and its uncertainty bounds. Impedance tracking consists of two stages. In the first stage, the actual noise estimate is obtained from least squares (LS) residua. In the second stage, the noise covariance matrix is approximated with the use of residual information. Then weighted least squares (WLS) method is applied in order to estimate impedance and background voltage. Finally uncertainty bounds for impedance estimation are computed. The robustness of the method has been verified using simulated signals. The proposed method has been compared to sliding LS. The results have shown, that the method performs much better than the LS for all considered cases, even in the presence of significant background voltage variations.