In a large high-sided skillet or cast-iron pan, add pepper, onion powder, water, milk and pasta. Bring to a boil, stirring regularly. Turn down to a simmer and continue to stir regularly, cooking for 10 to 15 minutes, or until almost all of the liquid is absorbed.
Add the cheese and mustard, stir until melted through. Stir in butter. Season with salt and pepper, remove from heat and garnish with chives.