Heat the oven to 400 degrees.
In 12" skillet,over medium high heat, heat 1 tbsp.
vegetable oil;add onion and chili powder;cook about 10 minutes,stirring frequently,until onion is tender and coated with chili powder.
Remove onion to large bowl;wipe skillet clean.
To bowl with onion,add beef,egg,chilies,bread crumbs,1 tbsp.
of each of cheeses and salt;using hands or wooden spoon,blend well.
Shape mixture into 1 1/4" balls.
In skillet over medium-high heat,heat remaining 2 tbsp.
oil;add meat mixture;cook 15 minutes,turning frequently,until well browned on all sides and cooked through.
Meanwhile,place tortilla chips in single layer on jelly-roll pan;bake 10 minutes until crisp and golden.
Prepare Zesty Tomato Salsa.
To serve:Spoon meatballs into center of large serving platter;sprinkle with remaining Monterey Jack and Cheddar cheese.
Arrange tomato wedges and lettuce around meatballs if desired.
Serve with tortilla chips and salsa.
Makes 4 servings.
ZESTY TOMATO SALSA: In a 2 qt.
saucepan over medium high heat,heat 1 tbsp.
vegetable oil; add 1 each red and green bell pepper,cored,seeded and diced (about 2 cups),1 medium size onion,diced (about 3/4 cup) and 1 large clove garlic,crushed.
Cook about 10 minutes,stirring frequently,until tender.
Stir in 2 large fresh,ripe tomatoes,diced (about 2 cups) and 1/4 to 1/2 tsp.
hot red pepper sauce;cook 1 minute longer until heated through.
Makes about 1 1/2 cups.