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Preheat your oven to 350 degrees F.
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Pulse the cheese, flour, baking powder, sugar, chili powder and salt in a food processor until the cheese is well blended. Add the bacon and chives, pulse a couple of times, then add the bacon fat and butter and pulse until the mixture resembles coarse meal.
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Combine the milk and egg, add to the processor and pulse until the mixture is moistened and begins to pull together in a ball. DO NOT OVER-MIX.
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Turn the dough out on a lightly floured board and knead about 10-15 times, until the mixture no longer sticks to the board, adding a little more flour if needed, then flatten it into a circle about 1/2 inch thick. Using a sharp 3-inch round cutter, press straight down into the dough. Remove the circles without twisting the dough and place them on an oiled, parchment paper-lined, or non-stick cookie sheet. Bake until the biscuits are risen and golden brown, 20-25 minutes. Remove and serve warm with butter and honey and ENJOY!!