Preheat oven to 375°.
Heat oil in a Dutch oven over medium-high heat. Add onion and next 7 ingredients (onion through garlic); sauté 5 minutes. Add water and next 7 ingredients (water through chiles); bring to a boil. Reduce heat; simmer, uncovered, 10 minutes, stirring occasionally.
Spoon half of bean mixture into the bottom of a 13 x 9-inch baking dish; sprinkle with 1 cup cheese. Top with remaining bean mixture. Cover and bake at 375° for 40 minutes. Uncover; sprinkle with 1 cup cheese. Bake an additional 10 minutes. Press chips into casserole.