Preheat oven to 350°F. Lightly coat a 9-by-13-inch baking dish with cooking spray. Heat 2 teaspoons oil in a large nonstick skillet over medium-high heat. Add sausage; cook, stirring and breaking up the meat with a wooden spoon, until browned, 5 to 6 minutes. Transfer to a paper-towel-lined plate. Do not wipe the skillet clean.

Add the remaining 1 teaspoon oil to the skillet; heat over medium-high heat. Add onion and bell pepper; cook, stirring occasionally, until tender, about 7 minutes. Add garlic; cook, stirring often, until fragrant, about 1 minute. Add the vegetables to the reserved sausage.

Whisk eggs, milk, chili powder, cayenne and pepper in a large bowl. Add the sausage-vegetable mixture; stir until combined. Pour into the prepared baking dish. Top evenly with potato tots, arranging them in a single layer. Sprinkle with cheese.

Bake until the casserole is set and the cheese is golden brown, 40 to 45 minutes. Let stand for 10 minutes. Sprinkle with chives before serving.