Spanish Rice with Bacon

6 bacon strips, diced

1 tablespoon canola or vegetable oil

1 medium onion, chopped

1 cup uncooked long grain rice

1 3/4 cups water

2 large tomatoes, chopped

1 medium green pepper, chopped

2 jalapeno peppers, seeded and chopped*

1 teaspoon chili powder

1/2 teaspoon salt

In a large skillet, cook bacon over medium heat until crisp. Remove to paper towels. Add oil to the drippings; saute onion for 3 minutes. Add rice; stir until golden brown, about 5 minutes. Stir in the remaining ingredients. Bring to a boil. Reduce heat; cover and simmer for 30 minutes or until rice is tender. Sprinkle with bacon.