Preheat the oven to 375˚F. In a medium skillet, saute chopped bacon, adding jalapeno after a few minutes, until golden brown.
Bring water to a boil in a big pot over medium/high heat, add potatoes, return to boil, then reduce heat to medium and season potatoes will 1 tsp salt. Cook until potatoes are easily pierced with a knife then drain well.
Meanwhile, in a small saucepan, add the butter, milk, garlic powder, and onion powder and cook until butter is melted. Turn the heat off, keep the saucepan on the stovetop to keep the milk hot. Add the sour cream and whisk until combined.
Mash or beat potatoes with a mixer until creamy. Add the milk mixture and continue mixing until well incorporated. Transfer potatoes to a baking dish.
Sprinkle ½ of the bacon mix over the potatoes, top with shredded cheese, and sprinkle the rest of the bacon mixture on top.
Bake at 375˚F for 25 minutes. Remove and let cool for 5 minutes.