Grate potatoes and onion. Squeeze in a tea towel to remove excess moisture.
Mix in egg, salt, and pepper. Add baking powder and flour.
In a cast iron skillet, heat oil to 350° (use enough oil to come up halfway). When the oil is hot, drop potato mix by spoonful.
Cook for 3-4 minutes per side until golden brown. Serve immediately with sour cream and applesauce.