1. Preheat oven to 350 degrees F.
Cook onion and butter on medium-low heat until softened and translucent. Stir in flour, garlic powder and pepper. Cook an additional 2 minutes.
Gradually pour in milk while whisking over medium heat until thick and bubbly. Remove from heat and add dry mustard, paprika, cream cheese and 1 1/2 cups of cheddar cheese. Stir until melted.