1. In 4-quart saucepan over medium heat, in 1 tablespoon hot salad oil, cook peppers, onion, basil, and 1/2 teaspoon salt until vegetables are tender, stirring often, about 10 minutes.
2. Meanwhile, in bowl, with fork, beat eggs, water, and 1/2 teaspoon salt until blended. In 10-inch skillet over medium heat, heat 2 tablespoons salad oil. Pour egg mixture into hot oil, tilting skillet to coat bottom evenly with mixture. Cover and cook 3 to 5 minutes until egg is set, occasionally tilting skillet and lifting edge of cooked egg to let uncooked portion run underneath. Carefully turn egg pancake to brown on other side, adding more oil if necessary.