In a large skillet cook onion, sweet pepper, and garlic in hot oil until tender. Add chili powder; cook 1 minute more. Stir in undrained tomatoes, water, rice, chile peppers, salt, 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 the shredded cheese.