Per the ScanGauge manual:
Displays the calculated Horsepower your vehicle is currently
making. This value can be adjusted for accuracy through the
Advanced Setup parameters (see page 17).
Page 17 says:
Set a Horsepower Adjustment
ScanGauge reports Horsepower (HP) as a built-in digital
gauge. This parameter allows you to make adjustments
to the HP reading ScanGauge reports.
Basically the way I read this is that the user has to adjust the Scangauge to read the HP that the owner expects from his vehicle. If you are at throttle that you feels is maximum HP, just set your Scangauge to read that HP. From then on, it should de-rate the HP as it gathers different readings from different sensors. This is in the advanced set-up portion of the owner's manual.