MELT butter in large, nonstick skillet over medium-high heat. Add peppers and garlic; cook, stirring occasionally, for 5 minutes or until peppers are tender. Remove peppers; keep warm. Allow skillet to cool slightly.
ADD chicken broth and evaporated milk to skillet and bring to a boil; slowly stir in grits. Cover; reduce heat to low. Cook, stirring occasionally, for 8 to 10 minutes or until grits are thickened. Add pepper mixture and cheese; stir until cheese melts. Season with salt and pepper, if desired.