In large skillet, cook the slices bacon over medium heat til crisp. Remove bacon and drain on paper towels, reserving 1 tablespoon drippings in skillet. Crumble bacon; set aside.
In large pan, mix potatoes, the water, and bouillon granules. Bring to boiling;reduce heat. Simmer, covered, about 15 minutes or til potatoes are very tender.
Meanwhile add onions to reserved bacon drippings. Cook over medium low heat for 8 to 10 minutes or til tender and golden, stirring occasionally. Remove from heat. If desired, set aside some of the sauteed onions for garnish.
Mash potatoes slightly with a potato masher. Stir in milk, 1/4 tsp. pepper, the reserved bacon and onions; heat through. If desired, season to taste with additional pepper and garnish with extra crisp cooked bacon and reserved sauteed onions. Makes 6 servings.