Preheat oven to 400 degrees. Spray a 1.5 - 2 quart baking dish with butter flavored non stick spray.
In a medium sauce pan, heat the butter over medium heat until melted. Whisk in the flour. Cook and stir constantly until the mixture is smooth and bubbly, about 2 - 3 minutes. Gradually stir in the milk, whisking constantly. Add the heavy cream and sour cream at the same time, whisking. Stir in the salt and pepper.
Cook and whisk the white sauce until it bubbles. Reduce heat and stir until it thickens. Remove from heat.
Evenly layer half of the thinly sliced potatoes and onions in the bottom of the baking dish. (I suggest using a mandolin or the slicing side of your box grater to get a very thin slice.) Top with half of the chopped bacon and peppers. Sprinkle one third of the cheese.
Pour half of the white sauce over this layer. Repeat the layers (potatoes, onions, bacon, peppers, cheese, white sauce.)
Top with the remaining pepper jack cheese. (Use extra if desired.)
Cover and bake for 1 hour. Remove cover and bake for an additional 15 to 30 minutes until the potatoes are tender and cooked through. Watch the top carefully so it does not burn.