Combine butter and 1-1/2 cups sugar. Beat with mixer until well blended. Beat in eggs and mix until smooth. Add thyme, orange peel, flour and baking powder; mix well.
Put remaining 1/4 cup sugar into a shallow bowl.
Shape dough into 3/4-inch balls (chill dough to make this step easier).
Roll balls in sugar to coat, and place on ungreased baking sheet.
Bake at 375 degrees F. until edges are brown, about 12-15 minutes.