1. Combine milk, water, butter, 1/4 teaspoon salt, and 1/8 teaspoon black pepper in a saucepan over medium-high heat. Bring to a simmer; gradually add grits, stirring constantly with a whisk. Reduce heat to medium; cook 4 minutes or until thick, stirring occasionally. Remove from heat; stir in cheese.
2. While grits cook, cook bacon in a large nonstick skillet over medium heat until crisp. Remove bacon from pan, reserving 2 teaspoons drippings; crumble bacon. Add shrimp to drippings in pan; cook 2 minutes on each side or until done. Remove shrimp from pan. Add white onion to pan; sauté 1 minute. Stir in bacon, tomatoes, remaining 1/4 teaspoon salt, and remaining 1/8 teaspoon black pepper; sauté 2 minutes, stirring occasionally. Add shrimp, pepper sauce, and red pepper; cook 1 minute or until shrimp are heated. Serve over grits; sprinkle with green onions.