This sounds great at first blush, I would love to try it. Unfortunately, it's just not possible to do in southern California. The *ONLY* gas station in southern California that offers E85 is Pearson Ford in El Cajon/San Diego (about 100 miles away from me, I'm near Disneyland in Orange County). Currently, E85 is $3.11/cash or $3.18 if you use a credit/debit card per gallon.
If I'm gonna take a ~25% hit on fuel economy, that means E85 would need to cost $2.77 to equal the money-per-gallon ratio of Premium 91 (which is currently at $3.69 near my house). It would only become a benefit if it cost LESS than $2.77/gal, in terms of money-per-mile.
But, it ends up costing more than Premium 91 octane. Not to mention, E85 simply isn't available yet. So what's the point?
The only way it would be "cheaper" would be if you ran 100 octane all of the time. Here's my comparison...based on local information, today...
VP Racing Unleaded, 100 octane
$5.89/gal
20 gal tank = $117.80 per tank
Roughly 18mpg (in my 940)
Roughly 360 miles per tank
Roughly 32.7 cents per mile
E85 Ethanol
$3.18/gal (credit/debit...$.07 discount if you pay cash)
20 gal tank = $63.60 per tank
Roughly 13.5 mpg (25% reduction from gasoline)
Roughly 270 miles per tank
Roughly 23.6 cents per mile
Gasoline, 91 oct.
$3.69/gal
20 gal tank = $73.80
Roughly 18 mpg
Roughly 360 miles per tank
Roughly 20.5 cents per mile
...I'm thinking maybe in a year or two, when E85 is commonly available, it might be a viable option. But for a So Cal resident, E85 is about as practical as commuting in a Saturn EV-1 and praying for a charging station every 50 miles.