To prepare sauce, combine granulated sugar and water in a medium, heavy saucepan. Cook over medium-low heat 3 minutes or until the sugar dissolves. Cover and cook over medium heat 1 minute. Uncover and cook 5 minutes or until light golden (do not stir).
Remove from heat, and let stand 1 minute. Add butter; stir until melted. Add evaporated milk; stir constantly. Place pan over medium heat; cook 3 minutes or until caramel melts and mixture is smooth, stirring constantly. Remove from heat; stir in vanilla and salt.
To prepare French toast, pour sauce into a 13 x 9-inch baking dish coated with cooking spray. Arrange 8 bread slices in dish. Spread preserves evenly over bread; top with remaining bread.
Combine fat-free milk and next 6 ingredients (through eggs). Pour milk mixture over bread; sprinkle with pecans.
Preheat oven to 350°.
Bake, uncovered, at 350° for 35 minutes or until top is golden. Let cool 5 minutes. Sprinkle with powdered sugar.