Heat oven to 350°F. Beat butter in large bowl until light and fluffy. Gradually add 2 1/2 cups powdered sugar, beating until well combined. At medium speed, add eggs 1 at a time, beating well after each addition. Beat in lemon peel and 3 tablespoons lemon juice. Lightly spoon flour into measuring cup; level off. At low speed, gradually beat in flour and baking powder; blend well.