The amplitude and phase of voltage and current can be measured by the phasor measurement unit（PMU） to supply full-scale measurement information. Based on the innovation graph technique with the AC power flow model， the bad data identification method using the Kirchhoff's voltage law（KVL） is proposed. The interacting relation of circuit voltage drop between two loops including the common tree branch in the innovation graph is deduced for the first time. Then the bad data contained in the loop are identified using the interacting relation. The method has such advantages as comparatively small calculating burden， fast identifying speed and adaptability to the wide area measurement system（WAMS）. By cooperating with the innovation difference vector method， the method proposed can identify the bad data which the innovation difference vector cannot identify. The effectiveness of the method proposed is demonstrated on an IEEE 30-bus system with fairly good effect of identifying strongly interacting bad data.