Let me back up a bit. If I ignore all the stuff about the O2 sensor, and just read where you have engine power problems and sputtering issues, then my first thought would be to replace the sparkplugs, plug wires, distributor cap and rotor. That is, if they haven't been replaced in the past two years. Those items have a reasonable cost and are simple to change. I consider them to be normal wear items and replace them at the first sign that my car isn't running at it's best.
If any of those items are causing a misfire, the symptoms would be sputtering and power loss under certain conditions. Those conditions vary from car to car, but overall the sputtering usually doesn't happen all the time.
A major characteristic of a misfire is that the gas in the cylinder doesn't ignite. So when the exhaust valve opens, raw gas goes down the exhaust, and along with it goes the oxygen that didn't burn with the gas. Since you have an oxygen sensor in the exhaust, it reads large ammounts of oxygen, the ecu thinks the mixture is too lean and reacts by adding more fuel. It's similar to a bad O2 sensor, they both make the ecu add more fuel. If the ecu has enough capacity, it can add enough fuel to make the misfires worse, which might lead the ecu to think the O2 sensor is bad. It's possible the logic in the ecu is setup to flag a bad O2 sensor under these conditions. OTOH if your car has electronic ignition (distributorless) then the ecu has a chance to diagnose the difference between a bad O2 and bad ignition circuit.
HTH
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Dave W.
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