In a large skillet cook onion, sweet pepper, and garlic in hot oil until tender.
Add chili powder; cook one minute more.
Stir in undrained tomatoes, water, rice, undrained green chili peppers, salt, black pepper, and, if desired, several dashes hot pepper sauce.
Bring to boiling; reduce heat. Simmer, covered, about 20 minutes or until rice is tender and most of the liquid is absorbed. If desired, sprinkle with shredded cheese.