In a large skillet, cook bacon over medium high heat until crisp. Drain, reserving drippings. If necessary add oil to drippings to measure 1/3 cup. In a small bowl, combine dripping mixture, egg and milk, set aside. Crumble bacon, set aside.
In large bowl combine flour, sugar and baking powder. Make well in center. Add egg mixture all at once to flour mixture, stirring just until moistened. Batter should be lumpy. Fod in bacon, cheese. Spoon into greased or paperlined 2 1/2 inch muffin cups. Fillling about 3/4 full.