Dice and dry out the bread: Cut your bread into roughly 1 to 2 inch sized chunks, and arrange them evenly on a baking sheet. If you’re using fairly fresh bread you’ll need to let it sit for a couple of hours to dry out. However, if you are using old bread that is already stale then you don’t need to dry it out for more than 1 hour.

Cook bacon until crispy and then roughly chop it into pieces.

Combine the egg, milk, and spices: Crack each egg into a medium sized mixing bowl. Then add the milk, salt, pepper, onion powder, and cayenne pepper. Whisk these ingredients together until thoroughly combined.

Assemble the casserole: Grease a 9×13 casserole dish with either butter or a spray oil like PAM. Next, arrange the dried pieces of bread evenly along the bottom of the dish. Follow this up by spreading the chopped bacon and diced green chilies over top. Then sprinkle on the 2 cups of shredded cheese. And finally, pour the egg and dairy mixture over everything and give the dish a little shake so that it pours down into every nook and cranny.

Cover the casserole dish with aluminum foil or plastic wrap and place it in your fridge overnight.

Preheat your oven to 325℉/162℃

Bake the casserole: Take the casserole out of your fridge and remove the aluminum foil/plastic wrap. Then place it in your heated oven and let it bake for 35 to 45 minutes. You will know that the casserole is finished baking when the top and edges are golden brown/crispy. And when a toothpick is inserted in the center of the casserole and comes out clean.

Take the breakfast casserole out of your oven and let it rest for 5 to 10 minutes.

Slice it up and enjoy!