This is the best baked potato soup I've ever made or eaten. It's close to Houston's famous potato soup, but I've found that this recipe is even better. Baking the potatoes instead of boiling them makes all the difference in the flavor.
Wash and scrub potatoes, pat dry. Rub potatoes with butter and place in baking pan, bake at 350 for 1 hour and 15 minutes or until done. Remove from oven and cool slightly. (See Note Below)
When the potatoes have cooled enough to touch, peel the potatoes. While potatoes are cooling, pour milk and cream into a saucepan and scald over medium heat. Whisk occasionally to keep from sticking. DO NOT BOIL!
When little bubbles start forming around the edge of the milk, and the milk makes a sizzling noise when splashed on the inside of the saucepan, it's done. Scalding will keep the mixture from separating. Add salt, white pepper, granulated onion, and butter.
Dice potatoes and add four of the five potatoes to milk mixture and simmer about 20 minutes. Remove it from the heat and let it cool slightly.
Process mixture with your boat motor (immersion blender), or process in an electric blender in batches. Set aside the 5th diced potato. Dice should be about 1/4" - 1/2".
To the pureed potatoes add sour cream (optional), chives and 1 cup shredded cheddar cheese; mix well. Add remaining diced potatoes and simmer on very low, stirring frequently for about 15 - 20 minutes. If soup is too thick add chicken broth as needed to reach desired texture. Soup will thicken as it simmers.
Taste and adjust seasonings again. When ready to serve ladle into individual bowls and garnish with extra cheddar cheese, bacon, chopped green onions or chives, and sour cream. Enjoy!
*NOTE: For faster preparation of the potatoes, instead of baking them, puncture the potatoes several times with a fork and bake in the microwave oven until done.