Is e85 ethanol cheaper than regular gas and does it produce more power?

yes. E-85 is rated at 105 octane, making it the same as high end race gas. This means more compression and timing can be achieved, directly translating into higher cylinder pressures. A secondary power increase is that the air fuel ratio of Ethyl alcohol is 9-10:1, which means more fuel can be added to the same air, creating more power. Technically the fuel has 20% or so less energy, but it more than makes up for it. As far as a performance motor built to take full advantage of e-85 as opposed to a motor only converted to alcohol, there is a big difference in power. It all has to do with cylinder pressure, as a converted motor can not take full advantage (some low compression motors will actually decrease) of the fuel's characteristics. cost wise it is way, way, way, cheaper than 105 race gas, and about the same as pump gas when you consider the lost fuel economy offsetting the cheaper cost of E-85... maybe a bit more.