Heat a large, deep skillet over medium heat. Add the olive oil. When the olive oil is hot, add the diced onion and bell pepper. Saute, stirring occasionally, until the onions and peppers are mostly tender, about 5 minutes.
Stir in the diced grilling cheese, chilli powder, dried oregano, garlic powder, salt, and pepper. Saute 1-2 minutes.
Stir in the diced tomatoes and bring to a low boil. Reduce the heat and simmer, stirring often, until the sauce has reduced a bit, about 8-10 minutes.
Meanwhile, cook the pasta according to package directions.
Stir the cooked pasta into the sauce, then pour the mixture into a medium baking dish. Top with shredded oaxaca cheese.
Transfer the baking dish to the oven and bake for roughly 15 minutes, until the cheese is mostly melted and the sauce is bubbling on the edges. Broil on high for 2-3 minutes, or until the cheese is completely melted and golden. Let cool for 15 minutes before serving.
