Place water, milk, butter, and salt in a large, heavy-bottomed saucepan. Bring to a boil.
Gradually whisk in the grits. Reduce heat to low. Cover and cook, stirring occasionally for 10 minutes.
Uncover, add in undrained can of tomatoes and cook uncovered for another 5 to 10 minutes, stirring frequently. Add a little extra water if getting too thick.
Stir in cheeses until melted. Stir in garlic powder and green onions. Remove from heat.