The Treasure Hunter card says:
Gain (2 Power). You pay (1 Power) less the next time you defeat a Monster with Treasure under it this turn.
I wonder why did they use "pay 1 less" instead of "gain 1".
Does it mean:
I have 5 power; kill a 5-power monster; and now I still have 1 power to spend (I have spent 4 instead of 5).
I have 4 power; with treasure hunter I can kill a 5-power monster. Now I have 0 power left.
It means that any monster with a treasure underneath it requires one less power to kill it.
So if the monster normally requires 5 power but it has a treasure underneath it, it only requires 4 this turn.
Thus, both of your choices are correct.