In 1-quart microwaveable bowl, microwave chips, butter, lemon peel and juice uncovered on High 1 minute; stir. Microwave about 30 seconds longer or until mixture can be stirred smooth.
Pour mixture over cereal, stirring until evenly coated.
Pour into 2-gallon resealable food-storage plastic bag.
Add powdered sugar. Seal bag; gently shake until well coated.
Spread on waxed paper or foil to cool. Store in airtight container.