Distance relays can not operate correctly when two-points-to-earth faults in potential transformer secondary side occurs. It is because that the faults will cause mistake of voltage measurement. It is concluded that relays for grounding faults will be influenced， because only zero sequence voltage are influenced when two-points-to-earth faults in potential transformer secondary side occurs. Based on the R-L equivalent circuit of transmission line， a novel distance protection algorithm based on parameter identification is proposed. The zero sequence voltage is taken the place of the voltage calculated with zero sequence current（normally， which can be measured correctly） and the system impedance. By using the proposed method， the problem of mal-operation of distance relays caused by two-points-to-earth faults in potential transformer secondary side may be solved effectively. Simulation with data from ATP verifies the validity and reliability of proposed method. And its practicability is also verified by field data.