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In a large bowl, combine the warm water, sugar, and yeast. Let sit for 10 minutes until foamy.
In a separate bowl, whisk together the evaporated milk, eggs, and shortening.
Add the milk mixture to the yeast mixture and stir to combine.
Gradually add the flour, stirring until a soft dough forms.
Turn the dough out onto a lightly floured surface and knead for 2-3 minutes until smooth and elastic.
Place the dough in a lightly greased bowl, cover, and let rise for 1 hour.
Punch down the dough and roll out to ¼-inch thickness on a lightly floured surface.
Cut the dough into 2-inch squares.
In a large pot or Dutch oven, heat 2-3 inches of vegetable oil to 350°F.
Fry the beignets in batches for 2-3 minutes per side until golden brown.
Drain the beignets on a paper towel-lined plate and dust generously with powdered sugar.