In a small saucepan, cook onion and green sweet pepper, if you like, in the butter until tender.
In a very large mixing bowl, combine potatoes and onion mixture. Add cheese, sour cream, chicken soup, and chili peppers. Mix well.
Spoon into a 13x9x2-inch (3-quart rectangular) baking dish. You can cover the potatoes and refrigerate them for up to 24 hours.
Cover and bake in a 350 degree F oven for 45 minutes. Uncover and sprinkle corn chips on top. Bake, uncovered, 15 minutes more (20 to 25 minutes more if refrigerated) or until potatoes are tender and mixture is bubbly. Makes 8 to 10 servings.