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Preheat oven to 350°F. Grease the bottom and 1/2 inch up the sides of two 8-by-4-inch loaf pans. Set aside.
In a large bowl, combine flour, sugar, baking soda, nutmeg, salt, cinnamon and baking powder. In a small bowl, combine egg, applesauce, oil, orange zest and vanilla; add to flour mixture. Stir until just moistened. Fold in zucchini, walnuts and chocolate chips.
Divide the mixture evenly between the prepared pans. Bake for about 55 minutes or until a toothpick inserted near centers comes out clean. Cool in the pans on a wire rack for 10 minutes. Remove the bread from the pans and cool completely on the rack. For easier slicing, wrap and store overnight before serving.