The EPA said flex fuel fleet average in the US when power was taken into consideration was 3% better in efficiency, see the bottom of page 7 here: 
http://www1.eere.energy.gov/bioenergy/pdfs/analysis_saab2007.pdf 

That is the specific modified SAAB vs. US averages. Apples to Oranges. And that is not the EPA but a contractor for Oak Ridge national labs, part of the dept. of energy. 

I guess what they are saying is that by modifying the engine to perform optimally on ethanol you can eliminate the drag on MPG. I suspect that is going to add some cost for building it.