1/4 cup warm water (about 100 degrees F)
1 packet active dry yeast
3 cups all purpose flour
1 1/2 tsp baking powder
1/2 tsp baking soda
1 tsp salt
1/4 cup sugar
5 T cold butter, cut into small chunks
3/4 cup buttermilk
Combine the yeast, warm water and a pinch of the sugar in a small bowl and set aside for five minutes. The water will start to look foamy and bubble a little bit. That's normal.
Meanwhile, combine the flour, baking powder, baking soda, salt and sugar in a large bowl. Using your fingers, cut in the butter and work mixture together until it resembles coarse sand.
Mix together the egg and the buttermilk. Add to yeast and then add to dry ingredients. Stir together to form a soft dough and then continue to knead (or use your Kitchen Aid) until dough becomes smooth and elastic. If using a Kitchen Aid, keep your speed on medium and beat with paddle attachment (or dough hook) for 6-8 minutes until smooth. If using your hands, make sure you are working on a lightly floured surface. The dough will feel smooth like pizza dough when it's done.
Spray a bowl with cooking spray and drop in your dough ball. Cover with plastic wrap and let rest for 15 minutes. Then, roll out dough into a large rectangle or square on a floured surface. Cut square into five long strips and then cut those strips into squares. Place squares on a lined baking sheet, spray with cooking spray and cover with plastic wrap. Let rise for 45 minutes.
Preheat oven to 400 degrees. Bake beignets for 10-12 minutes or until lightly golden. Dust with powdered sugar and eat warm.