Using a small bowl, add warm water, yeast and 1 tsp of sugar; stir until well combined. Set bowl aside for 10 minutes.

Meanwhile, using the bowl for a countertop/electric mixer, add remaining 3 Tbsp of sugar, vegetable shortening and salt; mix on low speed until well combined.

Add warm milk, water, egg and yeast mixture; mix on low speed until well combined.

Add flour 1 cup at a time, mixing after each addition, until a smooth dough forms. (Note: The dough should be soft, but still pull away from the sides of the bowl.)

Transfer dough to a lightly-floured work surface. Fold several times and then transfer dough into a lightly-oiled bowl.

Cover bowl with plastic wrap and let rest in a warm location for 1 hour. (Tip: I like to let dough rise in the oven with the light turned on – just don’t turn the actual oven on!)

Fold dough again and place it back into the oiled bowl. Cover and refrigerate dough overnight.

The next day, place dough on a lightly-floured work surface. Roll dough to ¼” thickness. Using a sharp knife or a pizza wheel, cut dough into 2” square pieces.

Using a large Dutch oven or deep frying, add enough vegetable oil to fill bottom 3” of the pot. Heat oil to 350°F. (Test oil by dropping a pinch of dough into oil. If it bubbles immediately, then oil is ready.)

Gently lower 4-5 beignets into the hot oil. Fry each batch for 2-3 minutes, turning frequently during frying, or until beignets are golden brown.

Transfer beignets to a paper-towel (or brown paper grocery bag) lined plate. Repeat process with remaining beignets.

While beignets are still hot, generously dust the tops with powdered sugar. Serve immediately.