Preheat oven to 350°F; generously spray a 9x13-inch dish with cooking spray.
Cook sausage in a large skillet over medium-high 8-10 minutes until browned and crumbled, adding onion and pepper during last 3 minutes; drain grease and set aside.
Spread thawed hashbrowns evenly in dish.
Layer sausage mixture over hashbrowns; sprinkle with 2 cups cheddar.
Whisk eggs, milk, sour cream, garlic powder, salt, and pepper in a large bowl.
Pour evenly over casserole so eggs seep into all layers.
Top with remaining 1 cup cheese.
Bake uncovered 40-45 minutes until center eggs set and top is golden brown; a knife inserted in center should come out clean.
Stand 5-10 minutes before cutting into squares; serve with fresh chives or green onions if desired.