Preheat oven to 350 degrees F (175 degrees C). Lightly spray an 8x8-inch baking dish with non-stick cooking spray.
Sprinkle 2 tablespoons water into each squash half. Place squash, cut side down, in a microwaveable dish. Microwave on high until soft, about 10 minutes.
Scrape out squash strings with a fork and place in a mixing bowl. Add Parmesan cheese, cream, egg, garlic powder, Italian seasoning, salt, and pepper. Mix thoroughly. Transfer mixture to prepared baking dish. Sprinkle with shredded Cheddar cheese.
Bake in preheated oven until browned and set, about 30 minutes.