The power gain comes from the fact that higher ethanol count takes longer to burn, so instead of one quick burst to push the piston down with gasoline, the E85 burns the whole length of piston travel, which CAN lead to higher performance. Also burns cooler and releases less carbon, leading to a cleaner burn/engine.

"It is true that a vehicle does require more E85 than regular gas since the amount of energy per unit of ethanol is less than that of gas. Ethanol has a lower ignition temperature so the engine overall will run cooler increasing power. It also burns slower so instead of just burning out in one violent explosion forcing the piston down, it continues to burn the entire length of the piston stroke expanding gases more evenly and smoothly. So running E85 will give any engine more power over any pump gas. Also E85 is 105 octane. Gas comes in 87, 89 and 91 octane. The 105 octane of E85 will help to eliminate knocks and pings. All of these benefits will make an engine run smoother and quieter."