Combine 1/4 cup water, sugar and yeast in a small bowl. Allow to rest 5 minutes until frothy.
Combine peppers, 2 cups water, oil, butter, salt, seasoning mix, garlic powder and yeast mixture in a large mixer bowl. Add 2 cups of flour and beat for 2 minutes until thoroughly combined. Add enough remaining flour to form a soft dough.
Knead on a lightly floured surface for 6 to 8 minutes, until dough is smooth and elastic. Shape dough into a ball and place in a greased bowl, turning once to cover. Cover and let rise in a warm, draft-free place until dough is doubled in size, about 40 minutes.
Punch dough down. Divide dough into 18 rolls and place 6 rolls on each greased baking pan. Slightly beat egg with 1 tablespoon water and brush on rolls. Sprinkle with sesame seeds. Cover and allow to rise until doubled in size, about 30 minutes.
Bake for 18 to 20 minutes in a preheated 350°F oven.