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Preheat the oven to 450°F. Coat an 8x8x2-inch baking pan with oil; set aside.
Combine green pepper, red pepper and onion in a food processor, chop until very fine
In a large bowl mix together peppers, onion, ground beef, egg, tortilla chip crumbs, chili powder and black pepper. Form into 12 2-inch meatballs and place them snugly into the prepared pan in rows, making sure the balls are touching. Bake for 25 minutes or until the meatballs reach an internal temperature of 160°F. Let rest in the pan for five minutes before serving.