Preheat your oven to 450°F and adjust the rack to the middle position. In a bowl, whisk together tomato sauce, water, chili powder, cumin, sugar, garlic powder, and pepper. In a separate bowl, combine ½ cup Monterey Jack cheese, shredded chicken, 1 tablespoon cilantro, and ¼ cup of the tomato sauce mixture.
Spread ¼ cup of the sauce over the bottom of an 8-inch square baking dish. Brush both sides of the tortillas with oil, stack them, and wrap in a damp dish towel. Microwave for about 1 minute until warm and pliable.
Working with one tortilla at a time, spread ⅓ cup of the chicken mixture across the center. Roll tightly, placing the seam-side down in the baking dish. Repeat for all tortillas. Pour the remaining sauce over the enchiladas and sprinkle the remaining ½ cup of Monterey Jack cheese down the center.
Cover the dish tightly with greased aluminum foil and bake for 20 minutes until heated through and the cheese is melted. Let cool for 10 minutes. Sprinkle with the remaining tablespoon of cilantro and serve with lime wedges.