Pierce the brats with a knife or fork in several places. Combine the beer and brats in a large saucepan. Bring to a boil. Simmer the brats for 10 minutes. Remove the brats from the beer and set aside.
Pour ⅓ cup simmered beer into a liquid measuring cup and discard the rest. Melt 1 tablespoon of the in the saucepan. Add the flour and cook 1 minute, until the mixture is foamy and begins to smell nutty. Whisk in the reserved beer, milk, ground mustard, and garlic powder. Bring to a simmer and cook 3 to 5 minutes, or until thickened. Stir in the cheese and season with salt and pepper to taste.
Preheat a grill to medium-high heat. Grill the brats 5 to 10 minutes, turning occasionally, until browned and cooked through. Grill the onion 5 minutes or until tender. Brush the pretzel buns with softened butter and grill 1 minute or until toasted.
Place the grilled brats and onion into each bun and top with cheese sauce before serving.