In a large skillet over medium heat, cook the chopped bacon until it is crisp. Use a slotted spoon to remove the bacon and set it aside on a paper towel-lined plate. Leave about 2 tablespoons of bacon drippings in the pan. Toss in your diced onions and bell peppers, sautéing until softened (about 5 minutes).

To ensure the potatoes are soft throughout, you can either boil the cubes for 5 minutes until fork-tender or sauté them in the skillet with the remaining bacon fat until the edges are golden. Do not skip this step! Raw potatoes often don’t cook fully in the time it takes for eggs to set.

In a large mixing bowl, whisk together the 12 eggs, milk, garlic powder, onion powder, smoked paprika, salt, and pepper. Whisk vigorously to incorporate air, which helps the casserole stay light and fluffy.

Spread the cooked potatoes, onions, peppers, and half of the crispy bacon evenly across the bottom of your prepared baking dish. Pour the egg mixture over the top, ensuring it seeps into all the nooks and crannies.

Top the dish with the shredded cheddar cheese and the remaining bacon. Place in the center rack of the oven and bake for 35–45 minutes. The casserole is done when the center is set (it shouldn't jiggle) and the edges are slightly puffed and golden.

Remove from the oven and sprinkle with fresh chives. Let it sit for 5–10 minutes before slicing. This resting period allows the eggs to finish setting and makes it much easier to serve clean squares.