HEAT oven to 350°F.
BRING water to boil in medium saucepan on medium-high heat. Gradually stir in grits until blended; cook on low heat 5 min., stirring occasionally. Remove from heat. Add 1/2 cup shredded cheese, Neufchatel, butter, garlic powder and red pepper; stir until cheeses are melted. Set aside.
BEAT eggs lightly in small bowl; stir in small amount of hot grits mixture until blended. Gradually add egg mixture to remaining hot grits mixture, stirring constantly until blended. Pour into 8-inch square baking dish sprayed with cooking spray.
BAKE 30 min.; sprinkle with remaining shredded cheese. Bake 10 min. Let stand 10 min. before serving.