Place the bacon in a large pan over medium high heat. Cook until crispy. Remove the bacon from the pan and place on paper towels. Leave 2 tablespoons of bacon fat in the pan; discard the rest.
Bring a pot with water to a boil. Cook the pasta according to package instructions. Drain and set aside.
Add the flour to the pan, then whisk until combined, about 30 seconds. Pour in the water and whisk until thickened and smooth. Add the milk, salt, pepper, garlic powder, then bring the mixture to a simmer and whisk until everything is combined, about 5-7 minutes at medium heat.
Turn the heat to low, then stir in the cheddar cheese and the cooked pasta. Keep stirring until the sauce is smooth. If you need a thinner sauce, add 1 tablespoon of milk at a time until it reaches the desired consistency. Stir in half of the bacon and mix.
Serve and top with more bacon and chives.