Higher octane rating from including ethanol can improve the power output - but only if the engine can take advantage of the higher rating. This will not often be the case. For example, if talking about an older engine, you need to increase the compression ratio and tune it for the higher octane (including changing jets), although a modern turbocharged engine may be able to do this under control of the ecu.
Even in these cases, I doubt if the extra power from improved efficiency can make up for the lower energy content of the ethanol.
John

