Cheesy potato soup

6 med. potatoes
1 small to med. onionchopped
16 oz Velveeta cheese
1/2 pkg. bacon, browned and broken into pieces
2 tsp. sugar
3 cup milk
1 stick butter
1/2 cup flour
Salt to taste
Pepper to taste
Chopped green onions

Peel and cube potatoes. Place in pot with just enough water to cover potatoes. Bring to a boil; cover and cook until tender. Do not drain water from potatoes once done. Add cheese and bacon pieces. Cook onions in bacon drippings. While cheese is melting, prepare a white sauce as follows: melt butter in saucepan over low heat. Blend in flour, salt, pepper, and sugar. Add milk quickly, stirring constantly, until mixture thickens and bubbles. Add white sauce to potatoes and cheese mixture. Add chopped green onions. Enjoy!