Heat oven to 350° F. Spray a 8"x8" baking dish with cooking spray.
In a large mixing bowl, add the mashed potatoes, sour cream, milk, 1 cup of the shredded cheese, 3/4 of the chives, salt, and pepper. Mix well.
Add the mashed potato mixture to the baking dish and lightly pat down with a spoon or spatula. Cover with foil and bake for 25 minutes.
Take out of oven after 25 minutes and remove foil. Sprinkle on the remaining 3/4 cup of cheese, the bacon pieces, and the remaining chives. put back into the oven, uncovered, and bake for another 20 minutes or until the cheese is melted and the potatoes are bubbling.